Airtel pre-pays Rs 15,519 cr to DoT to clear all deferred liabilities

Bharti Airtel on Friday said that it has paid Rs 15,519 crore to the Department of Telecom towards pre-payment of the entire deferred liabilities pertaining to spectrum acquired in auction of year 2014. The company had acquired 128.4 MHz spectrum (including Telenor spectrum) for a consideration of Rs 19,051 crore in the 2014 auction.

These liabilities were due in annual instalments 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 seven-plus years.

The company estimates that the pre-payment will likely result in interest cost savings of at least Rs 3,400 crore over the residual life for fully substituted capital.

"Airtel continues to exercise flexibilities 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," the telco said in a statement. 

The telecom sector recently got a shot in the arm with government approving a blockbuster relief package for the industry, which included a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid, and allowing 100 per cent foreign investment through the automatic route.

The measures, aimed at providing relief to companies, also included the scrapping of spectrum usage charge (SUC) for airwaves acquired in future auctions.

Airtel has already stated that it will opt for four-year payments moratorium -- on AGR and spectrum dues -- being offered by the government as part of a relief package for the telecom sector.

The company registered net profit of Rs 1,134 crore for the September 2021 quarter, as against a loss (attributable to owners of the parent) of Rs 763.2 crore during the year-ago quarter. Its consolidated revenues for the second quarter of FY21 stood at Rs 28,326.4 crore, up 18.8 per cent year-on-year (on a comparable basis) and 13 per cent y-o-y on a reported basis.

Bharti Airtel's about Rs 21,000 crore rights issue, which had opened on October 5 and closed on October 21, 2021, was oversubscribed. 

(With inputs from PTI)