Airtel paid Rs 8,815 cr to DoT for 2015 auction
On Friday, Bharti Airtel said it paid Rs 8,815 crore to the Department of Telecommunications (DoT) for partial prepayment of deferred debts relating to spectrum acquired in the 2015 auction. 2027 and 2028.
As of December last year, the company had paid Rs 15,519 crore for early repayment of all deferred debt relating to spectrum acquired in the auction held in 2014. These liabilities bore an interest rate of 10% and were repaid through a combination of strong free cash generated from operations, equity income and significantly lower cost debt of similar duration.
Airtel said it continues to focus on financial flexibility through its capital structure, including optimizing the cost of funding and capitalizing on any opportunities for significant interest savings like this prepayment.
After that, Bharti Airtel is left with spectrum rights of around Rs 66,000 crore payable in deferred installments. The company has already opted for a four-year moratorium on these payments, proposed by the government.
Apart from Bharti Airtel, Reliance Jio had settled its spectrum auction debts by paying Rs 30,791 crore to the government.
The first auctions were organized by the government in 2010 for 3G spectrum, but at that time companies had to pay the full amount of the bid up front. It is only in the auctions organized since 2013 that the government has introduced the notion of deferred payment. Under it, companies are supposed to pay 25-33% of the total bid amount up front, followed by a two-year moratorium and the rest in equal installments spread over 16 years with present value. net intact.