Reliance Jio Prepays Rs 30,791-Crore Deferred Spectrum Dues

India’s largest telecom operator by active users said it has cleared all deferred spectrum liabilities acquired in auctions prior to March last year.

Reliance Jio Infocomm Ltd., the carrier owned by Mukesh Ambani’s Reliance Industries Ltd., has paid Rs 30,791 crore to the Department of Telecommunications towards prepayment of the entire deferred dues related to spectrum auctions in 2014, 2015, 2016, and the spectrum acquired in 2021 through trading of right to use with Bharti Airtel Ltd., according to a company statement. Reliance Jio had acquired 585.3 MHz spectrum via the said auctions/trading.

This came after the telecom department, in December last year, provided the carriers flexibility to prepay their deferred spectrum liabilities on any date.

These liabilities, the statement said, were “due in annual installments from FY 2022-23 to 2034-2035 and carried interest rate between 9.30% and 10% p.a. with an average residual period of 7+ years”. Reliance Jio estimates the prepayments to lead to interest cost savings of around Rs 1,200 crore annually, at current interest rates.

A month ago, Bharti Airtel had paid the government Rs 15,519 crore to clear deferred liabilities acquired in spectrum auctions in 2014. On Jan. 7, it informed the bourses that it wouldn’t avail the option to convert pending interest on deferred spectrum and adjusted gross revenue dues into equity—a one-time opportunity offered by the government to help struggling carriers.

Vodafone Idea Ltd., however, opted to convert its dues into equity, giving the Indian government single largest shareholding with nearly 36% stake in the company.