Airtel Eyes Equity Deal with Govt for Spectrum Payments, Pushes for Fair Competition

As per news reports, Bharti Airtel has approached the Department of Telecommunications (DoT) seeking conversion of its deferred dues into equity. The request has been made under the 2021 telecom reforms package, which allows telecom companies to defer payments and convert the interest component into government equity.

As of 9:31 AM on April 25, Bharti Airtel share price was trading at ₹1,846.70, up by ₹1.10 (0.06%) for the day, with a 6.90% gain over the past month and 10.85% over the past six months.

Call for Equal Treatment

Airtel has also raised the issue of equal application of the equity conversion clause. The company’s communication follows the government’s move to convert dues worth ₹36,950 crore into equity for Vodafone Idea, raising its stake in the operator to around 49%.

Reports suggest, while the reform package is available to all operators, any conversion into equity will be assessed individually. The government has clarified that future conversions will be considered on a case-by-case basis following proper evaluation.

Prepayments Made by Airtel

Last month, Airtel prepaid ₹5,985 crore ($698.33 million) to fully settle high-cost liabilities from the 2024 spectrum auctions. This reduced the company’s total spectrum-related debt to ₹52,000 crore (approximately $6.27 billion). The prepayment also brought down the cost of debt to 7.22%.

In FY25 so far, Airtel has prepaid ₹25,981 crore of high-cost spectrum dues. Cumulatively, the company has prepaid ₹66,665 crore as of now. These prepayments were made ahead of schedule, some by nearly seven years, and helped clear ₹1,16,405 crore worth of future instalments.

The average interest rate on these prepaid liabilities was around 9.74%, including amounts previously charged at 10%, 9.75%, and 9.3%.

Background of the Reform Package

The telecom reforms package, announced in September 2021, offered a four-year moratorium on adjusted gross revenue (AGR) and spectrum dues. It also provided the option to convert the interest portion of the deferred amount into equity.

The moratorium ends in September 2025 for spectrum payments and by March-April 2026 for AGR dues. Repayments will resume in 2026 and continue until 2031.

Read more: Bharti Airtel Share Price Hits 6-Month High Ahead of Strong Q4 Results!

Conclusion

Airtel’s request will now be reviewed by the government, with no confirmation yet on approval. The company has not responded to queries regarding the matter.

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