Mumbai . According to telecom sector major Vodafone Idea, the government's decision to waive bank guarantee for the telecom industry has come as a big relief and this step of the government will help in promoting 4G and 5G investment.
Debtladen Vodafone Idea said in a regulatory filing that it has received a letter from the Department of Telecommunications regarding waiver of bank guarantee. This step has come as a big relief for the debtridden telecom company.
Vodafone Idea said in a note, “This waiver is indicative of the government's continued support to the telecom industry. This decision of the government will ensure that the exposure of the banking system is used by telecom operators for the further deployment of 4G and 5G networks in India. Let it be done for.”
The Department of Telecommunications, in a communication issued on December 27, 2024, has waived off the requirement of submitting financial bank guarantee for spectrum acquired in auctions held in 2012, 2014, 2015, 2016 and 2021, subject to certain terms and conditions.
Before this reform, bank guarantees of about Rs 24,800 crore had to be provided by Vi for each spectrum installment, the company said in a BSE filing.
Other major companies like Bharti Airtel are also expected to benefit from this decision. No bank guarantee will be required to be provided by the operator for 2012, 2014, 2016 and 2021.
Vodafone Idea said in a statement that there will be a onetime partial shortfall for the 2015 auction, where the net present value of all payments made will be less than the proportionate value of spectrum used.
“We are in discussion with the DoT to determine the final amount of this partial reduction for the 2015 auction,” Vodafone Idea said.
The moratorium on spectrum auction dues for Vi expires in October next year and the bank guarantee had to be submitted 13 months before the next due payment.
Vi was expected to submit bank guarantees in installments for various spectrum auctions before 2022. However, the company did not deposit any of the scheduled installments in September and this month.
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Image Credit: KhasKhabar.