Vodafone Idea seeks removal of bank guarantee requirements for 2022 spectrum acquisition: Report
Mumbai: Vodafone Idea (Vi) has said it is currently in discussions with the Department of Telecommunications (DoT) to remove the bank guarantee requirements for spectrum acquired before 2022, as reported by The Economic Times.
This follows a notice from the DoT requesting Vi to provide bank guarantees (BG) as per existing regulations, given that no waiver decision has been made yet.
In a statement, Vi explained, “We would like to submit that the company has made detailed representations to the DoT and continues to be engaged with DoT for removal of the bank guarantee requirements for spectrum acquired before 2022. This is also an industry question.”
Vi faces a total bank guarantee obligation of over Rs 24,700 crore in the coming months.
Previously, the company requested the DoT to waive the BG submission.
While regulations introduced in 2022 allow firms acquiring spectrum in recent auctions to bypass BG submission, earlier rules required companies to submit a bank guarantee equivalent to one annual installment, according to the report.
If the DoT decides to eliminate the BG requirement for past spectrum dues, Reliance Jio and Bharti Airtel could also benefit.
Estimates suggest Jio’s BG obligations could reach around Rs 4,000 crore annually, while Airtel’s may be approximately Rs 3,000 crore.
To reduce interest expenses, both companies have been prepaying their spectrum dues. Last month, Airtel prepaid Rs 8,465 crore for the 2016 spectrum auction.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
