Airtel pays ₹8,312.4 cr for 5G spectrum; settles 4-yr dues

Telecom service provider Bharti Airtel Ltd says it has paid four years of 2022 spectrum dues upfront to the government. The telco, which was one of the main contenders during the recently concluded 5G spectrum auctions, has paid ₹8,312.4 crore to the Department of Telecom (DoT) towards dues for spectrum acquired.

The auction of the 5G spectrum ended after 40 rounds on August 1, with the government getting bids worth ₹1,50,173 crore. As per Bharti Airtel, it has the widest mobile broadband footprint across the country. During the recently-concluded auction for high-speed 5G spectrum, Airtel acquired 19,867.8 MHz spectrum by securing a pan India footprint of 3.5 GHz, 26 GHz bands, and selectively acquired low & mid-band spectrum for around ₹43,040 crore.

Airtel says the latest upfront payment, coupled with the moratorium on spectrum dues and AGR-related payments for four years, will free up future cash flows and allow Airtel to dedicate resources to single-mindedly concentrating on the 5G rollout.

Airtel has signed 5G network agreements with Ericsson, Nokia and Samsung to start 5G deployment from this month only. Both Ericsson and Nokia are connectivity and service management partners of Airtel for a long, while the partnership with Samsung will start this year onwards.

Over the last year, ahead of the scheduled maturities, Airtel has cleared ₹24,333.7 crore of its deferred spectrum liabilities. Gopal Vittal MD & CEO, Bharti Airtel Ltd. says the upfront payment of 4 years will allow it to drive 5G rollout in a concerted manner, given its operating free cash flow.

Airtel says it has access to ₹15,740.5 crore 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," says Vittal.

In the recently concluded 5G auctions, Reliance Jio led with bids for 24,470MHz of the spectrum at ₹88,078 crore followed by Bharti Airtel, which bid for 19,868 MHz at ₹43,084 crore and Vodafone Idea (₹18,784 crore). The Adani group accounted for the balance of ₹227 crore.

Sunil Mittal-led Bharti Airtel's net consolidated profit zoomed 466.8% to ₹1,607 crore for the April-June period on strong and consistent performance across the portfolio. The telco's net income before exceptional items for Q1 FY23 was ₹1,517 crore. India's second-largest telecom service provider reported consolidated quarterly revenue of ₹32,805 crore, up 22.2% YoY, including its India business revenue that grew 23.8% to ₹23,319 crore.

Over the past year, Airtel has tested 5G use cases at many locations. It showed the first 5G experience over a live 4G network in Hyderabad. The company also conducted the country's first rural 5G trial and the first cloud gaming experience on 5G. The Bharti Airtel stock is trading 2.37% up at ₹720.80 today.