Bharti Airtel has just announced that it paid Rs 8312.4 crore to the Department of Telecommunications (DoT) as the spectrum payment for the recently concluded 5G auctions. To recall, Airtel purchased spectrum worth Rs 43,084 crore in several frequency bands. The telco has paid an additional amount as an upfront payment to the DoT. The amount is for the next four years. This shows the great cash flow position Airtel has. This is not the first time in the last year that Airtel has paid dues before the due date.
Airtel believes that this upfront payment, coupled with the relief measures that the DoT provided in 2021, will help the company in freeing up future cash flows. Because of that, Airtel said that it would be able to concentrate further on the 5G rollout.
Airtel Has Cleared Dues Before Time Previously as Well
Last year, Airtel cleared Rs 24,333.7 crore as upfront payment of its deferred spectrum liabilities, much ahead of scheduled maturities.
Gopal Vittal, MD & CEO, Bharti Airtel, said that "This upfront payment of 4 years allows us to drive 5G rollout in a concerted manner given our operating free cash flow. Airtel also has access to Rs 15,740.5 Cr in capital from the rights issue, which is yet to be called. With the ideal spectrum bank, best technology and adequate free cash flow, we are excited to bring to the country a world-class 5G experience."
It will be interesting to see how Jio goes about its business in clearing spectrum dues. This is because Jio's annual due amount would be way higher because it purchased spectrum worth a little over Rs 88,000 crore. Airtel will save significantly on the interest dues, and this is also good revenue for the government from the telecom sector for this fiscal year. Airtel's focus, for now, is to deliver a strong 5G experience to the consumers, and with moves like this, the company has placed itself in a great position to do so.