Vi seeks spectrum surrender to reduce Rs 6,091-crore bank guarantee burden: Report

Facing financial difficulties, Vi, in its letter to DoT secretary Neeraj Mittal, informed that it cannot provide a Rs 6,091-crore BG or pay Rs 5,493 crore in cash to cover the shortfall from the 2015 spectrum purchase.

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26 Aug, 2025 12:21

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Vodafone Idea (Vi) has requested the Department of Telecommunications (DoT) to allow it to surrender some spectrum acquired in auctions before 2021. This would lower its bank guarantee (BG) requirement for the March 2015 spectrum auction from Rs 6,091 crore to Rs 2,900 crore.

Facing financial difficulties, Vi, in its March 10 letter to DoT secretary Neeraj Mittal, informed that it cannot provide a Rs 6,091-crore BG or pay Rs 5,493 crore in cash to cover the shortfall from the 2015 spectrum purchase,  according to a report by the Economic Times.

CNBC Awaaz had first reported the development on March 24.

The company stated that this is its only pending securitisation requirement from the March 2015 auction.

The telecom major proposed alternative solutions, including offsetting the requirement against excess payments made in past auctions or utilizing existing BGs and cash deposits held by the DoT for regulatory compliance.

The company pointed out that it had overpaid Rs 9,900 crore in the 2016 auction and Rs 8,800 crore in the 2012 and 2014 auctions.

As per the report, Vi also noted that discussions with DoT on surrendering pre-2021 spectrum have been ongoing.

Based on its proposal, the total spectrum obligation would decrease by Rs 4,800 crore, with Rs 3,200 crore of this reduction linked to the 2015 auction.

Vi further highlighted that it had previously provided DoT with Rs 5,800 crore in BGs for regulatory matters and a Rs 2,450 crore cash deposit during an internal restructuring of Vodafone Group entities in December 2015.

The company claimed that, in total, DoT holds Rs 26,950 crore in securitisation options, including past excess payments. It urged DoT to consider these options and refrain from any coercive action.

Additionally, in a letter dated March 11, Vi CEO Akshaya Moondra requested DoT to expedite the conversion of the company’s outstanding regulatory dues—including adjusted gross revenue (AGR) and spectrum payments—into equity. These dues pertain to spectrum acquired in the 2012, 2014, 2015, and 2016 auctions.

Vi will need to pay Rs 29,100 crore in March 2026. According to JM Financial estimates, annual regulatory payouts are expected to rise further from FY27, reaching approximately Rs 43,000 crore per year until FY31.

As of the quarter ending December, Vi’s adjusted gross revenue (AGR) dues stood at Rs 70,000 crore, while its cash reserves were just Rs 12,090 crore.