Bharti Airtel has made a significant move by prepaying ₹8,465 crore to the Department of Telecommunications (DoT) for 173.8 MHz of spectrum it acquired back in 2016. This decision aims to reduce interest costs and free up cash as the company works on enhancing its 4G network and expanding its 5G services.
Originally, Airtel had total dues of ₹14,244 crore, which were deferred as part of a government relief package for the telecom sector in 2021. These dues carried an interest rate of 9.3%.
According to company executives, most of the money for the prepayment came from Airtel’s own cash flow, while a smaller portion was borrowed from banks at lower interest rates. The prepayment also partially settled dues related to spectrum assets from Videocon, which Airtel acquired in 2016. However, the company did not reveal the interest rate for the remaining dues.
Analysts believe that this prepayment will help Airtel save on interest costs each year and improve its cash flow, especially as the nationwide rollout of its 5G network is nearing completion.
Previously, Airtel had also prepaid ₹7,904 crore to the telecom department, which cleared all its deferred liabilities related to spectrum bought in the 2012 and 2015 auctions. Despite these positive developments, shares of Bharti Airtel closed 1.46% lower on the Bombay Stock Exchange at ₹1,709.90 on Monday.
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