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Reliance Jio clears deferred spectrum liabilities worth Rs 30,791 towards 2014, 2015 acquisitions

Reliance Jio clears deferred spectrum liabilities worth Rs 30,791 towards 2014, 2015 acquisitions
Photo Credit: VCCircle
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Reliance Jio has announced that it has made a prepayment of Rs 30,791 crore to the Department of Telecommunications – towards clearing all deferred dues that it had for spectrum that it acquired prior to March 2021. The dues cleared as part of this payment include costs of spectrum acquisition in 2014 and 2015, as well as the spectrum trade that it had executed with Bharti Airtel, last year.

Deferred spectrum liabilities refer to dues that telecom operators owe the government for spectrum or airwaves that it acquired in a previous year.

Jio’s move comes after the DoT, in December last year, has announced the decision allowing telecom operators in India to pay their deferred spectrum liabilities on any given date. Prior to this, Jio had paid about Rs 10,700 crore in October 2021 towards its spectrum liabilities from auctions in 2016. In April 2021, Jio and Airtel entered into an agreement, with the latter transferring the ‘right to use’ agreement of blocks of 800MHz spectrum in Andhra Pradesh, Delhi and Mumbai. The agreement amounted to Airtel receiving Rs 1,037.6 crore as part of the agreement during the time, along with liability of Rs 459 crore. The same has also been cleared now.

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According to a statement by Jio, the company had acquired a total of 585.3 MHz in spectrum from the auctions and agreements mentioned above. The deferred liabilities had a residual period, or moratorium of at least seven years, and were due to be paid to the DoT in annual instalments starting FY 2022-23. The deferred amounts carried interest rates of between 9.3 and 10 percent. Jio said that the prepayment move will see the operator save about Rs 1,200 crore every year towards interest accrued on its deferred liabilities.

Apart from the above-mentioned auctions, Jio was the highest acquirer during the government’s spectrum auction in March 2021. During the auction, the operator acquired 488.35 MHz spectrum for a price of Rs 57,122 crore.

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