Airtel prepays ₹8,815 crore to clear deferred spectrum liabilities

Bharti Airtel on Friday said it has paid ₹8,815 crore to the Department of Telecommunications towards part prepayment of deferred liabilities pertaining to spectrum acquired in auction of year 2015.

The prepayment is for instalments due in financial year 2026-27 and FY28.

Over the last four months, Airtel said it has cleared ₹24,334 crore of its deferred spectrum liabilities much ahead of scheduled maturities.

In December, the telecom operator paid ₹15,519 crore to the telecom department.

These liabilities carried an interest rate of 10% and have been paid off through a combination of strong free cash generated by business, equity proceeds and significantly lower cost debt of similar tenor, the company said in an exchange filing.

Airtel said 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 telecom major was supposed to pay back the liabilities arising from this spectrum acquisition in annual instalments between financial years 2026-2027 and 2031-2032.

Last month, India's second largest telecom operator reported a 3% year-on-year drop in net profit to ₹830 crore in the third quarter. Its profit in the year-ago period stood at ₹854 crore.

The company clocked a 12.6% jump in revenue to ₹29,867 crore in the quarter ended December compared with ₹ 26,518 crore in the same period a year ago.

Its mobile average revenue per user (ARPU) per month rose to ₹163 in during the third quarter as against ₹146 in the same quarter last year. The company had raised tariffs on prepaid plans in November last year. The carrier's operating profit rose 22.4% on a yearly basis to ₹29,867 crore while EBITDA margin expanded by 398 basis points to 49.9%.

Its overall customer base stood at around 485 million across 16 countries. Of this, about 129 million subscribers are from Africa.

In January, Alphabet-owned Google said it will invest up to $1 billion in Bharti Airtel as it looks to scale offerings of India's second largest telecom operator and build a strong digital ecosystem for consumers.

The deal, part of Google for India Digitization Fund, includes an equity investment of $700 million to acquire 1.28% stake in Airtel at ₹734 apiece and up to $300 million toward potential commercial agreements over the course of the next five years, the telecom operator had said.

The deal will focus on enabling affordable access to smartphones across price ranges, and explore building on their existing partnerships to potentially co-create India-specific network domain use cases for 5G and other standards, the companies had said.

The partnership came over a year after the tech giant paid ₹33,737 crore to acquire a 7.73% stake in Reliance Industries-owned Jio Platforms, India's biggest telecom operator and a rival of Airtel.