New Delhi: Vodafone Idea has said it remains in discussions with the Department of Telecommunications (DoT) for removal of bank guarantee requirements for spectrum acquired before 2022.
This follows a ET report yesterday about DoT issuing a notice to the company to pay bank guarantee (BG) as required by rules as no decision on waiver has been taken so far.
“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 ask,” the company said in a filing to the BSE, which has sought clarification on issuance of notice from DoT.
“As and when a final decision is taken by the DoT, the company will make the necessary disclosures as required by law,” it added.
The DoT has been in discussions with the Finance Ministry concerning the removal of BG requirements. Vodafone Idea (Vi) is required the submit the BGs as moratorium for spectrum auction dues for the company comes to an end in September 2025 and BGs have to be submitted at least a year in advance for securing the dues. Vi was scheduled to submit bank guarantees in tranches for different auctions, starting from September 20.
Vi needs to submit bank guarantees worth a total of over Rs 24,700 crore to the government in the coming months.
Vi had earlier written to DoT seeking a waiver for submitting bank guarantees. While the companies need not provide bank guarantees for airwaves purchased in auctions from 2022 onwards, earlier rules mandated firms to provide a bank guarantee of an amount of one annual instalment.
In case the DoT decides to waive the bank guarantee requirement for past auction dues, Reliance Jio and Bharti Airtel, along with Vi, will also benefit to an extent. As per estimates, Reliance Jio’s annual bank guarantee requirement could be to the tune of Rs 4,000 crore while the amount for Airtel could be around Rs 3,000 crore.
Airtel and Jio have both been clearing past spectrum dues by prepaying in order to save on interest costs. Last month, Airtel prepaid Rs 8,465 crore to DoT for the 2016 spectrum auction.
This follows a ET report yesterday about DoT issuing a notice to the company to pay bank guarantee (BG) as required by rules as no decision on waiver has been taken so far.
“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 ask,” the company said in a filing to the BSE, which has sought clarification on issuance of notice from DoT.
“As and when a final decision is taken by the DoT, the company will make the necessary disclosures as required by law,” it added.
The DoT has been in discussions with the Finance Ministry concerning the removal of BG requirements. Vodafone Idea (Vi) is required the submit the BGs as moratorium for spectrum auction dues for the company comes to an end in September 2025 and BGs have to be submitted at least a year in advance for securing the dues. Vi was scheduled to submit bank guarantees in tranches for different auctions, starting from September 20.
Vi needs to submit bank guarantees worth a total of over Rs 24,700 crore to the government in the coming months.
Vi had earlier written to DoT seeking a waiver for submitting bank guarantees. While the companies need not provide bank guarantees for airwaves purchased in auctions from 2022 onwards, earlier rules mandated firms to provide a bank guarantee of an amount of one annual instalment.
In case the DoT decides to waive the bank guarantee requirement for past auction dues, Reliance Jio and Bharti Airtel, along with Vi, will also benefit to an extent. As per estimates, Reliance Jio’s annual bank guarantee requirement could be to the tune of Rs 4,000 crore while the amount for Airtel could be around Rs 3,000 crore.
Airtel and Jio have both been clearing past spectrum dues by prepaying in order to save on interest costs. Last month, Airtel prepaid Rs 8,465 crore to DoT for the 2016 spectrum auction.
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