Airtel raises Rs 8,500 cr to pay for 3G licence

Bharti Airtel is learnt to have raised about Rs 8,500 crore (Rs 85 billion) from a consortium of financial institutions, including State Bank of India, to pay for third generation mobile spectrum.

According to sources, HDFC and HDFC Bank have agreed to part finance the amount that Bharti has to pay the government for 3G spectrum by May 31.

Bharti won the bids for 13 circles, including Delhi and Mumbai, for Rs 12,295 crore (Rs 122.95 billion).

The loan is spread over six years and carries an interest rate in the range of 8-9 per cent, sources said.

Last week, SBI chairman O P Bhatt had said the bank had set aside Rs 20,000 crore (Rs 200 billion) for financing the cost of 3G spectrum licence.

However, amount commitment made by individual financial institutions could not be ascertained.

Bharti Airtel, however, declined to comment on the issue.

Bharti will offer 3G spectrum in Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh (W), Rajasthan, West Bengal, Himachal Pradesh, Bihar, North East, Jammu & Kashmir, Assam, Delhi and Mumbai.

Bharti may have to pay more later if it wins some of the licences for the ongoing Broadband Wireless Access auction.

In March, Bharti tied-up $8.5 billion to finance the acquisition of Kuwait-based Zain Telecom's African assets.