Vodafone Idea Says DoT’s BG Waiver Comes As ‘Relief For Telecom Industry’

Before the reform, VIL was required to submit nearly Rs 24,800 crore in bank guarantees against each spectrum installment, 13 months prior to the installment falling due for the above auctions

It further informed that it was in discussion with the Department of Telecommunications (DoT) to understand the final amount of the partial shortfall for the 2015 auction.

Source : Vodafone Idea

The telecom department waived off the bank guarantee requirement required for spectrum auctions, Vodafone Idea said on Saturday. The telecom private player said that this relief would help boost 4G and 5G investments in the country. 

These auctions took place prior to the reform package, reported PTI. Before the reform, Vodafone Idea Limited (VIL) was required to submit nearly Rs 24,800 crore in bank guarantees against each spectrum installment, 13 months prior to the installment falling due for the above auctions, the firm informed via an official filing.

The company said, “As per our understanding of the terms and conditions, out of all the 5 auctions mentioned above, no BGs (bank guarantee) will be required to be provided by VIL for the 2012, 2014, 2016 and 2021 auctions. There would, however, be a one-time partial shortfall, only for the 2015 auction, where the net present value or NPV of all payments made would be less than the pro-rated value of spectrum used.”

It further informed that it was in discussion with the Department of Telecommunications (DoT) to understand the final amount of the partial shortfall for the 2015 auction. The company further extended its gratitude to the authorities for their ‘continued support to the telecom industry’ via the latest step of the bank guarantee waiver.

The firm said that the exposure of the banking system would be better utilised by the companies towards expanding 4G and 5G networks in the country. According to the telecom reform package of 2021, no bank guarantee was needed to be provided for the spectrum auction held after the reform package.

In a communication dated December 27, 2024, the DoT informed that it has dispensed with the need to submit Financial Bank Guarantees for the spectrum bought in the auctions conducted in 2012, 2014, 2015, 2016, and 2021, subject to terms and conditions.