Bharti Airtel, India’s second-largest telecom operator, has prepaid Rs 8,325 crore to the Department of Telecom (DoT) towards part prepayment of the deferred liabilities pertaining to spectrum acquired in the 2015 auction. The company said that this move will reduce its interest cost by 10 per cent.
Spectrum auction in 2015
Bharti Airtel had won spectrum worth Rs 29,129.08 crore in the auctions that were held in March 2015. The company had paid Rs 11,374.7 crore as upfront payment, while the remaining amount was deferred for a period of 18 years with an annual interest rate of 10 per cent .
Prepayment of deferred liabilities
According to a statement issued by the company on Tuesday, Bharti Airtel has prepaid Rs 8,325 crore to the DoT towards part prepayment of the deferred liabilities for spectrum acquired in the 2015 auction. The company said that this will reduce its interest cost by 10 per cent and improve its cash flow position .
Impact on financial performance
Bharti Airtel’s prepayment of spectrum liabilities is expected to have a positive impact on its financial performance. The company reported a net profit of Rs 1,017 crore for the quarter ended December 2023, compared to a net loss of Rs 1,035 crore in the same period a year ago. The company’s revenue grew by 15.9 per cent year-on-year to Rs 28,790 crore, driven by strong growth in its mobile, home broadband and enterprise segments. The company’s average revenue per user (ARPU) increased by 6.6 per cent quarter-on-quarter to Rs 162, while its subscriber base reached 348.3 million as of December 2023.
Bharti Airtel is also gearing up for the upcoming spectrum auction in February 2024, where it is expected to bid for additional airwaves in the sub-GHz bands to enhance its network coverage and capacity. The company has also been investing in expanding its 5G network, which it launched in three states in January 2023.