Airtel Seeks Spectrum Dues-to-Equity Conversion from Modi Govt, Cites Vi Precedent

Bharti Airtel has reportedly written to the Narendra Modi government, requesting the conversion of its outstanding spectrum dues into equity—just a month after Vodafone Idea (Vi) received a similar benefit.

According to CNBC TV18, the Sunil Mittal-led telecom major is seeking treatment similar to that of Vodafone Idea, whose spectrum liabilities were converted into equity in March. This led to the government's stake in Vi increasing from 22.6% to 49%. The Ministry of Communications had converted Rs 36,950 crore of Vi’s outstanding spectrum auction dues into equity.

This move was part of the September 2021 Telecom Sector Reforms and Support Package, aimed at alleviating financial stress in the telecom industry.

Questions sent to Bharti Airtel regarding the development by Outlook Business remained unanswered at the time of publication.

The company’s stock was trading 1.88% lower at Rs 1,846.35 per share as of 2:17 AM.

How Much Spectrum Dues Does Airtel Owe?

As of December 2024, Bharti Airtel’s spectrum dues stood at approximately Rs 74,000 crore, while Vodafone Idea’s dues were higher at Rs 1.34 lakh crore. If approved, Airtel’s move could significantly reduce its debt burden and provide greater financial flexibility amid intensifying competition and ongoing 5G investments.

On March 26, the company said it had prepaid Rs 5,985 crore to the Department of Telecommunications, fully settling high-interest liabilities from the 2024 spectrum auctions, which originally carried an 8.65% rate. Additionally, $1 billion in Perpetual Notes—with a 5.65% coupon and no fixed maturity—were voluntarily redeemed.

So far in FY25, spectrum liability prepayments have totaled Rs 25,981 crore, contributing to a cumulative prepayment of Rs 66,665 crore. These dues, which carried an average interest rate of 9.74%, were settled nearly seven years ahead of schedule. As a result, Rs 116,405 crore in future installments has been cleared. The average interest cost on the remaining Rs 52,000 crore of spectrum liabilities has now been reduced to approximately 7.22%, the company said.

These remaining liabilities are structured for repayment until FY2042. About $479 million in perpetual notes remain outstanding and are callable in FY2026, it added.

In its third-quarter earnings, the company said it had also prepaid Rs 3,626 crore to the Department of Telecommunications, clearing all liabilities for spectrum acquired in 2016.