Airtel prepays additional spectrum dues of Rs 5,985 cr for 2024 auctions

Airtel subsidiary redeems $1 billion worth of perpetual bonds

Bharti Airtel and its subsidiary Bharti Hexacom Ltd have prepaid an additional ₹5,985 crore to the Department of Telecommunications (DoT) for the spectrum acquired in the 2024 auctions, paying off high-cost debt, the company said on Wednesday.

 

Airtel's subsidiary Network i2i Ltd has also voluntarily called and redeemed $1 billion worth of perpetual bonds.

 

With the latest payment, Airtel has now prepaid all its spectrum dues that had interest costs higher than 8.65 per cent. The spectrum liabilities were prepaid nearly seven years ahead of their average residual maturities, reducing Airtel's exposure to costlier debt, the telco said in a statement.

 

Airtel has now prepaid ₹25,981 crore of high-cost spectrum liabilities for the current 2025 financial year and has cumulatively prepaid spectrum liabilities of ₹66,665 crore. “The prepayments have resulted in Airtel clearing ₹1.16 trillion of scheduled instalments that would have otherwise been payable on their respective dates over the original tenure of the liabilities,” the company said.

 

As a result of the latest move, the telco has also lowered its cost of debt on the spectrum liabilities to an average of approximately 7.22 per cent on the remaining ₹52,000 crore of liabilities, excluding adjusted gross revenue dues. The residual spectrum liabilities now carry a long repayment profile, payable in annual instalments until FY42.

 

Airtel's subsidiary Network i2i Ltd has also voluntarily called and redeemed $1 billion in perpetual notes.

 

Perpetual notes or bonds are fixed-income securities that, unlike traditional bonds, don't have a fixed maturity date, but come with a 'call option' or 'redemption' feature. This allows the issuer to redeem (or recall) the bond at a specific time or under certain conditions.

 

Domiciled and incorporated in Mauritius, the company operates a submarine telecom cable connecting Chennai, and Singapore, and utilises a network of submarine cable systems and associated terrestrial capacity. “The network consists of consortium ownership of submarine cable systems like South East Asia- Middle East- Western Europe -4 (SWM4), Asia America Gateway (AAG), India- Middle East - Western Europe (IMEWE), Unity, Europe India Gateway (EIG), and East AFrica Submarine System (EASSY),” according to the company's audited financial statements for FY24.

 

On Thursday, shares of Bharti Airtel gained ₹2.6, closing 0.1 per cent higher at ₹1,709.9.

 

Prepayment done

 

The last such prepayment from Airtel had come in December last year, when it cleared all dues owed to the government for spectrum acquired in 2016, prepaying ₹3,626 crore. With it, the telco prepaid all its spectrum dues that had interest costs higher than 8.65 per cent.

 

In 2024, Airtel prepaid a total of ₹28,320 crore of spectrum liabilities, the company had said. In June, that year, Airtel had already cleared all its dues from the 2012 and 2015 auctions, by prepaying ₹7,904 crore to the DoT. Three months later, it paid ₹8,465 crore of dues for the 2016 auction in September.