You are here: Home » Companies » News
Business Standard

Airtel prepays Rs 8,815 cr of spectrum dues to reduce interest expenses

This is the second such prepayment by Airtel in the last three months and comes on the back of strong cash flow generation, equity infusion and borrowing at significantly lower interest rates

Bharti Airtel | Spectrum Auction | Airtel

Aneesh Phadnis  |  Hyderabad 

Between 2012 and 2017, Bharti Airtel bought BWA spectrum from Qualcomm, Aircel and Tikona Digital who were the second players in different circles.

has prepaid Rs 8,815 crore of spectrum dues to cut down on interest expenses.

The dues pertained to spectrum acquired in 2015 and payments for same were due in FY2027 and FY2028, the telecom company announced on Friday.

This is the second such prepayment by the company in the last three months and comes on the back of strong cash flow generation, equity infusion and borrowing at significantly lower interest rates.

"Over the last four months, has cleared Rs 24,334 crores of its deferred spectrum liabilities much

ahead of scheduled maturities. These liabilities carried an interest rate of 10 per cent," it said.

After the latest payment, has balance spectrum dues of around Rs 67,000 crore and adjusted gross revenue dues of Rs 25,000 crore.

"Airtel continues to focus on financial flexibility via its capital structure including optimising cost of financing and capitalising on all opportunities of significant interest saves like this prepayment," the company said in a statement.

In December it had prepaid its entire liability of Rs 15,519 crore from its 2014 acquisition of 128.4 MHz spectrum. At that time Airtel had said the prepayment would help it in saving Rs 3400 crore annually in interest expenses.

The company had reported 2.8 per cent dip in net profit in net profit in Q3 FY 2022 due to higher tax outgo. Net profit for the quarter stood at Rs 830 crore. However it generated free cash flow of Rs 8803 crore in third quarter FY 22 compared to Rs 7046 crore in same period last year. The company had indicated that it would use its free cash flows to pay off high cost debt.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, March 25 2022. 10:38 IST