The paid amount relates to the deferred liabilities for the spectrum acquired in the 2014 auction.
Key points to note –
- The company had acquired 128.4 MHz spectrum (including Telenor spectrum) for a consideration of Rs 19,051 crores in the 2014 auction, of which Rs 5,597 crore was given upfront.
- Balance amount was due in annual instalments from FY 2027 to FY2032 and carried an interest rate of 10%.
- Airtel could prepay the amount, due to the Department of Telecom’s (DoT) decision giving the industry the flexibility to prepay their deferred liabilities anytime at their NPV basis the interest rates specified for the respective auction.
- The company estimates that the prepayment will likely result in interest cost savings of at least Rs 3,400 crores.
Taking advantage of the easing competitive pressures and government’s support to the Indian telecom industry, Airtel continues to look hard to improve it’s overall positioning by increasing tariffs, prepaying/ refinancing liabilities, working on value added products and calling for cooperation from Jio and Vodafone Idea.