Airtel stated that the move would result in interest cost savings of at least Rs 3,400 crore over the residual life for fully substituted capital.
Telecom operator Bharti Airtel informed on Friday that it has paid Rs 15,519 crore to the Department of Telecom towards prepayment of the entire differed liabilities for the spectrum acquired in 2014. The company mentioned that the move would result in interest cost savings of at least Rs 3,400 crore over the residual life for fully substituted capital.
The telecom operator had acquired 128.4 MHz spectrum (including Telenor spectrum) for a consideration of Rs 19,051 crore in the 2014 auction. It informed the liabilities were due in annual instalments from FY2026-2027 to 2031-2032 and carried an interest rate of 10 per cent - which was the highest rate amongst the deferred liabilities and borrowings. It carried an average residual life of more than 7 years.
"The company welcomes the Department of Telecom’s decision giving the industry the flexibility to prepay their deferred liabilities anytime at their NPV basis the interest rates specified for the respective auction. This allows the licensees to efficiently plan and use their cash flows," the company stated.
A the time of publishing, the telecom operator's stock was trading 2.48 per cent lower at Rs 665.25 on the BSE.
Back in October, Bharti Airtel had opted for a four-year deferment of the payment of spectrum auction instalments due up to four years alongside deferment of AGR-related due by a period of four years with immediate effect.
The telecom operator had stated that the other option offered by the Department of Telecommunication, of converting their interest accruing during the moratorium into equity, would be considered within the stipulated timeline of ninety days.