Reliance Jio Infocomm, India’s #1 telecom operator, announced it has paid Rs 30,791 crore (including accrued interest) to the Department of Telecom towards prepayment of the entire deferred liabilities pertaining to spectrum.

The company estimates that the above prepayments will result in interest cost savings of around Rs 1,200 crore annually, at the current interest rates.

Reliance Jio, promoted by billionaire Mukesh Ambani, acquired spectrum in auctions in 2014, 2015 and 2016. Reliance Jio also acquired spectrum in 2021 through trading of right to use with Bharti Airtel. The company had acquired 585.3 MHz spectrum in the said auctions/trading.

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

These liabilities were due in annual installments from FY 2022-23 to 2034-2035 and carried interest rate between 9.30 percent to 10 percent per year  with an average residual period of 7+ years.