Bharti Airtel clears Rs 5,985 crore high-cost spectrum liability, redeems $1 B debt

Bharti Airtel and its subsidiary Bharti Hexacom have paid an additional Rs 5,985 crore to the Department of Telecommunications (DoT), fully settling spectrum liabilities with an 8.65% interest rate tied to the 2024 auction. In parallel, Network i2i Ltd., another group subsidiary, has voluntarily exercised a call option to redeem USD 1 billion in perpetual debt notes issued in FY 2020.

These steps mark a continuation of Airtel’s focused effort to reduce its high-cost debt and strengthen its capital structure. In the ongoing financial year alone, the company has prepaid Rs 25,981 crore in high-interest spectrum dues. Cumulatively, Airtel has now prepaid Rs 66,665 crore of spectrum liabilities as of March 2025.

“Underscoring its commitment to financial prudence, operational efficiency, and its strong capital position, Airtel continues to prepay its high-cost spectrum liabilities, lowering its debt and cost of debt,” the company said in a statement.

The prepaid liabilities, which had an average interest rate of 9.74%, were settled around seven years ahead of their scheduled maturities. These include debt tranches with interest rates of 10%, 9.75%, and 9.3%, cleared ahead of time. As a result of these repayments, Airtel has eliminated Rs 116,405 crore worth of scheduled instalments that would have otherwise been due over the original tenure of these liabilities.

Long-term Impact on Debt and Financial Strategy

Following the latest prepayments, Airtel has lowered the average cost of debt on its remaining spectrum liabilities—excluding adjusted gross revenue (AGR) dues—to approximately 7.22%. The balance Rs 52,000 crore in spectrum obligations is now spread over a long-term repayment schedule, with annual instalments extending until FY 2042.

On the capital market front, the USD 1 billion perpetual notes redeemed by Network i2i Ltd. had carried an annual coupon rate of 5.65% and no fixed maturity. With this redemption, Airtel now holds approximately USD 479 million in perpetual bonds issued in FY 2021, which are callable in FY 2026.

The decision to retire perpetual debt and prepay high-interest spectrum dues ahead of schedule signals Airtel’s broader intent to improve its credit profile and reduce future interest costs while retaining balance sheet flexibility. These actions are also in line with its capital allocation strategy, which aims to strengthen long-term financial resilience.