Bharti Airtel Clears Rs 5,985 Crore in High-Cost Spectrum Dues to DoT

Bharti Airtel has made a substantial move to strengthen its financial position by prepaying Rs 5,985 crore to the Department of Telecommunications (DoT), effectively clearing high-cost spectrum dues stemming from the 2024 auctions. This strategic financial maneuver is aimed at reducing the company’s debt burden and lowering its interest expenses.

Airtel’s action underscores its commitment to financial prudence and operational efficiency. The prepayment directly reduces high-cost spectrum liabilities, leading to lower debt and reduced interest costs. The Rs 5,985 crore payment specifically addresses high-cost debt associated with the 2024 spectrum auctions, which carried an interest rate of 8.65%. This payment contributes to Airtel’s ongoing efforts to manage its financial obligations.

Airtel has now prepaid Rs 25,981 crore of high-cost spectrum liabilities in FY25 and cumulatively prepaid spectrum liabilities of Rs 66,665 crore as of the current date.  In a related development, Airtel’s subsidiary, Network i2i Ltd., also voluntarily redeemed $1 billion in perpetual notes, further enhancing the company’s financial stability.

hese actions are expected to improve Airtel’s cash flows and bolster its financial health as it continues to invest in its 5G network expansion and 4G rural coverage. The average interest rate on the cumulative liabilities prepaid was approximately 9.74%. Consequent to these payments, Airtel has lowered its cost of debt on spectrum liabilities to an average of roughly 7.22% on the residual Rs 52,000 crore of spectrum liabilities (excluding AGR liabilities).

By clearing these debts ahead of schedule, Airtel is saving significant amounts of money on interest payments, and freeing up capital for future investments.