Telecom major Airtel has prepaid Rs 8,024 crore to the Department of Telecommunications (DoT) as part of its deferred liabilities for the spectrum acquired in 2015 through an auction, the company said on Monday.

The Sunil Mittal-led telecom company said the sum was paid with an interest rate of 10 per cent as it leveraged refinance options at a much lower interest rate.

The move will help India’s second-largest telco to save on interest costs and boost cash flows as it rapidly rolls out 5G networks.

“Bharti Airtel has prepaid Rs 8,024 crore to the Department of Telecom (Government of India) towards part prepayment of deferred liabilities pertaining to spectrum acquired in the auction of the year 2015,” the company said in a release.

Deferred spectrum liabilities are dues owed by telecom operators to the government for airwaves bought in previous years. These are paid in instalments. They are separate from adjusted gross revenue (AGR) liabilities which relate to licensing fees.

The telecom major prepaid Rs 8,815 crore in March last year to clear dues of the airwaves bought in 2015 and Rs 15,519 crore in December 2021 for spectrum bought in 2014.

Airtel said it continues to focus on financial flexibility, including optimising the cost of financing and capitalising on all opportunities of significant interest savings such as the latest prepayment.

In the 5G spectrum auction held in July-August last year, Airtel secured spectrum worth Rs 43,084 crore. The country’s second-largest telecom provider started rolling out 5G services in October 2022.

The payment of deferred spectrum liabilities is expected to make up a large chunk of the government’s telecom revenues during the current year.