Vodafone Idea Negotiating with DoT to Eliminate Bank Guarantee Requirements
Vodafone Idea has urged the Department of Telecommunications (DoT) to eliminate the bank guarantee requirements for spectrum acquired prior to 2022 and has submitted detailed representations to support this request
Vodafone Idea
In response to reports from various media outlets about a DoT notice regarding the payment of bank guarantees (BG), the struggling telecom service provider clarified its position.
"We have made comprehensive representations to the DoT and continue to engage with them on the removal of bank guarantee requirements for spectrum acquired before 2022. This is also an industry-wide request," the company stated in a filing with the Bombay Stock Exchange (BSE).
The company further noted, "Once the DoT makes a final decision is made by the DoT, we will comply with all necessary disclosures as mandated by law."
Vodafone Idea had previously requested a waiver for the submission of bank guarantees. While telecom operators are no longer required to guarantee airwaves purchased in auctions held from 2022 onwards, earlier regulations mandated that they provide a bank guarantee equivalent to one annual instalment.
Reports indicate that Vodafone Idea's moratorium on spectrum auction dues is scheduled to end in September 2025, which necessitates that the company submit bank guarantees at least one year in advance to cover these dues. These guarantees are required to be submitted in phases for various auctions, with the first tranche due by September 20.
Additionally, Vodafone Idea has initiated "fresh dialogues" with the government following an unfavourable Supreme Court ruling regarding the re-computation of Adjusted Gross Revenue (AGR). Recently, the Supreme Court dismissed 19 petitions from telecom operators, including Bharti Airtel and Vodafone Idea, that sought to re-calculate their AGR dues.
On September 22, Vodafone Idea awarded a substantial $3.6 billion contract to Nokia, Ericsson, and Samsung for network equipment over three years. This marks a significant step toward the implementation of the company’s three-year capital expenditure plan of $6.6 billion, aimed at expanding 4G population coverage from 1.03 billion to 1.2 billion, launching 5G services in key markets, and enhancing capacity in response to growing data demands.
