Vodafone Idea terms DoT's bank guarantee waiver 'relief for industry'

The move is a significant relief for financially stressed Vodafone Idea (Vi)

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26 Aug, 2025 12:21

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Debt-ridden Vodafone Idea(Vi) on Saturday said that it has received a letter regarding the waiver of bank guarantee from the Department of Telecommunications (DoT). The move comes as a big relief to the financially stressed company.

The telecom department has waived the requirement of bank guarantee to be submitted for spectrum auctions held prior to the reform package, telecom operator Vodafone Idea said on Saturday, adding that the latest "relief" will boost 4G and 5G investments in India.

Prior to this reform, bank guarantees aggregating to about Rs 24,800 crore were required to be provided by VIL against each spectrum instalment, 13 months prior to the instalment falling due for the above auctions, the company said in a BSE filing.

The Department of Telecom (DoT) in a communication dated December 27, 2024, has dispensed with the requirement of submission of Financial Bank Guarantees for the spectrum acquired in auction held in 2012, 2014, 2015, 2016 and 2021, subject to certain terms and conditions.

Vodafone Idea Limited(VIL) in a press statement said that as per the telecom reform package of 2021, no Bank Guarantee (BG) was required to be provided for the spectrum auction held post-reform package as the industry had matured and past practice of BG was no longer required.

Vodafone Idea further said that the Department of Telecommunication, Government of India further extended its support to the telecom industry by dispensing with the requirement of Bank Guarantee to be submitted for spectrum auctions held prior to reform package i.e. for spectrum auctions of 2012, 2014, 2015, 2016 and 2021, provided the pro-rated value of spectrum used from the date of allocation till the end of three (3) months after the due date of payment of next instalment is less than the value of payment made by the telecom operator on an NPV basis.

"Prior to this reform, BGs aggregated to ~Rs 24,800 crore were required to be provided by VIL against each spectrum installment, 13 months prior to the installment falling due for the above auctions," the statement said.

Also Read: DoT likely to issue letters to telcos with bank guarantee waiver terms soon

"As per our understanding of the terms and conditions, out of all the 5 auctions mentioned above, no BGs will be required to be provided by VIL for the 2012, 2014, 2016 and 2021 auctions," it said.

However, there would be a one-time partial shortfall only for the 2015 auction, where the NPV of all payments made would be less than the pro-rated value of spectrum used it further said. "We are in discussion with the DoT to determine the final amount of this partial shortfall for the 2015 auction," VIL said in the statement.