Airtel was to pay Rs 15519 crore to the government. Airtel said in a statement that the company had acquired 128.4 MHz spectrum (including Telenor spectrum) in the 2014 auction for Rs 1,9051 crore. Which has been paid in advance by the company.
Bharti Airtel (“Airtel”), India’s premier digital communications solutions provider, today said that it has paid INR 15,519 crores to the Department of Telecom (Government of India) towards prepayment of the entire deferred liabilities pertaining to spectrum acquired in an auction of the year 2014. The company had acquired 128.4 MHz spectrum (including Telenor spectrum) for a consideration of INR 19,051 crores in the 2014 auction.
These liabilities were due in annual installments from FY 2026-2027 to 2031-2032 and carried an interest rate of 10% (the highest rate amongst the deferred liabilities and borrowings) and an average residual life of 7+ years.
The company estimates that the prepayment will likely result in interest cost savings of at least INR 3,400 crores over the residual life for fully substituted capital.
The company continues to exercise flexibility towards a stronger and efficient capital structure. The company welcomes the Department of Telecom’s decision giving the industry the flexibility to prepay their deferred liabilities anytime at their NPV basis the interest rates specified for the respective auction. This allows the licensees to efficiently plan and use their cash flows.
Airtel Increases Prepaid Tariff Plan
Notably, Airtel has recently changed its prepaid tariff plan to raise capital from the market. The telco has increased the price of its plan by up to 25 percent. After Airtel, the price of the prepaid tariff plan has also been increased by Vodafone Idea and Reliance Jio. Airtel believed that the company was suffering due to non-increasing the price of the tariff plan. Also, funds are needed for 5G infrastructure and other projects. In such a situation, the company is compulsorily increasing the prices of its tariff plans.