Bharti Airtel, a leading player in India’s telecom industry, has successfully prepaid ₹3,626 crore to the Department of Telecommunications (DoT), clearing all its dues for spectrum acquired in the 2016 auction. The company stated that this payment aligns with its strategy to manage high-interest liabilities, effectively reducing interest costs exceeding 8.65%.
Airtel’s aggressive prepayment strategy
The 2016 spectrum prepayment marks the completion of Airtel’s journey to settle all spectrum liabilities with higher interest rates. Over the course of 2024, the telecom giant prepaid a total of ₹28,320 crore in spectrum-related dues. This included ₹7,904 crore in June, clearing obligations from the 2012 and 2015 auctions, and ₹8,465 crore in September for the 2016 spectrum.
This financial prudence reflects Airtel’s commitment to maintaining a robust balance sheet and aligning with evolving government telecom reforms.
Market performance and competitive landscape
On Thursday, Bharti Airtel’s shares closed 1.46% lower on the BSE at ₹1,709.90. Airtel’s strategic move positions it competitively in the market alongside Reliance Jio, which had prepaid ₹10,700 crore for its 2016 spectrum liabilities back in October 2021. Jio further solidified its financial strategy by clearing interest dues through a ₹30,291 crore payment in January 2022.
Spectrum auctions: A historical perspective
The 2016 spectrum auction involved the sale of 2,354.55 MHz of spectrum across seven frequency bands. Telecom giants such as Bharti Airtel, Reliance Jio, Vodafone, Idea Cellular, and others participated, but only 40% of the spectrum was sold due to high base prices.
Subsequent telecom reforms, particularly the 2021 package, introduced measures like converting interest on moratorium principals into equity and waiving spectrum usage charges for auctions held between 2012 and 2022. These reforms have provided much-needed relief to telecom operators, ensuring smooth operations in a competitive market.
Fostering India’s telecom growth
Airtel’s proactive approach to clearing dues underscores its long-term vision for India’s telecom growth. By reducing financial burdens and optimizing capital allocation, the company is better equipped to invest in expanding its network, enhancing 5G adoption, and delivering superior customer experiences.
With India emerging as a global hub for digital innovation, Bharti Airtel’s disciplined financial strategy sets the tone for a resilient and future-ready telecom industry.
