Financial Insights

Reliance Jio prepays its debts worth Rs 30,791 crores

Reliance Jio Infocomm Ltd., the telecom arm of Reliance Industries, has prepaid its dues worth Rs 30,791 crores, including accrued interest, to the Department of Telecom (DoT). This clears its deferred spectrum liabilities pertaining to 2014, 2015, 2016 auctions and the spectrum acquired in 2021 through trading of right to use with Bharti Airtel Ltd. The telecom company had acquired the 585.3 MHz spectrum in these auctions.

“RJIL had executed the first tranche of prepayment on the anniversary date in the month of October 2021 pertaining to spectrum acquired in auction in the year 2016. Subsequent to Department of Telecom’s decision in the month of December 2021 providing the telcos the flexibility to prepay their deferred spectrum liabilities on any date, RJIL has now prepaid in the month of January 2022, the entire deferred liabilities acquired in auction in the year 2014 and 2015 as well as spectrum acquired through trading,” Reliance Jio said in a release on Wednesday.

According to the company’s statement, these liabilities were due in annual installments in FY 2022-23 to FY 2034-35 carrying a 9.3% to 10% interest rate with an average residue period of over seven years. The company estimates a cost savings worth over Rs 1200 crores at current interest rates due to the prepayment.

In December 2021, the DoT announced its decision to allow telecos to prepay their deferred spectrum liabilities on any date. The RJIL has now prepaid its entire deferred spectrum liabilities for the relevant years. Last month, Bharti Airtel paid Rs 15,519 crores to the DoT towards prepayment of its deferred spectrum liabilities.

Highlight by Aman Agarwal.

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