Why has Bharti prepaid its spectrum dues to the government?

Two of the largest telecom companies in India viz. Reliance Jio and Bharti Airtel have been very aggressive in paying off the spectrum fees ahead of the scheduled date to save on interest costs. For instance Bharti has just paid Rs.8,815 crore of spectrum fees ahead of schedule. This amount was due in FY27 and FY28 and pertained to deferred liabilities for spectrum acquired in the year 2015. This will result in major savings in interest outgo.

In last 4 months, Bharti has already paid Rs.24,334 crore of deferred spectrum dues well ahead of the scheduled dates. It is not just about Bharti Airtel but even Reliance Jio has prepaid Rs.41,583 crore of spectrum dues ahead of schedule. Thanks to a strong balance sheet, both companies are using cheap finance options to repay dues, especially the low cost funding that they get in global markets.

The government is really not complaining as this ensures early flows for the government, something they had not anticipated. The Rs.65,000 crore shortfall in divestment revenues this year due to the delay in the LIC IPO, would be made up by the prepayment of spectrum dues by Reliance Jio and Bharti. That is something really gratifying for the government too.