Bharti Airtel prepaids Rs 5,985 crore to DoT, reduces spectrum debt and interest costs

Bharti Airtel and its unit Bharti Hexacom have prepaid an additional Rs 5,985 crore to the Department of Telecommunications (DoT), fully clearing high-cost debt pertaining to the 2024 auctions that carried an interest rate of 8.65%.

In a separate development, Airtel’s subsidiary Network i2i Ltd also voluntarily called and redeemed $1 billion in perpetual notes.

“Underscoring its commitment to financial prudence, operational efficiency and its strong capital position, Airtel continues to prepay its high-cost spectrum liabilities, lowering its debt and cost of debt,” the Sunil Mittal-led telco said in a statement Wednesday.


This will help India’s second-largest telco save on interest costs and boost cash flows, even as it continues to bolster its countrywide 5G network and ramp up 4G rural coverage.

Airtel was the top buyer of airwaves in India’s second 5G spectrum sale last year. It had acquired 97 MHz of 5G airwaves worth Rs 6,856.76 crore, contributing around 60.5% to the central kitty. The government had collected a modest Rs 11,340.78 crore from its second 5G airwaves sale last June.

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 on date. The average interest rate on the cumulative liabilities prepaid was roughly 9.74%.

Airtel had earlier fully prepaid liabilities that had interest rates of 10%, 9.75% and 9.3%.

These prepayments have been made about seven years ahead of their average residual maturities, the company added. This has resulted in Airtel clearing Rs 116,405 crore of scheduled instalments that would, otherwise, have been payable on their respective dates over the original tenure of the liabilities.

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). The residual spectrum liabilities carry a long repayment profile, payable in annual instalments until FY42.

Last December, Airtel had similarly prepaid Rs 3,626 crore, clearing ahead of schedule all liabilities related to airwaves bought in the 2016 auction.

Separately, Airtel’s Mauritius-based subsidiary Network i2i Ltd has voluntarily exercised a call option and redeemed $1 billion in USD Perpetual Notes issued in FY20. The perpetual notes otherwise had no contracted maturity and carried an interest rate of 5.65%.

Post the redemption of $1 billion in perpetual notes, Airtel will have roughly $479 million of perpetual notes outstanding, which were issued during FY21. These notes can be called in FY26, the company said.