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Vodafone Idea (Vi) has written to the Department of Telecommunications (DoT) to allow it to surrender some spectrum acquired in auctions before 2021, which could reduce its bank guarantee (BG) requirement for the March 2015 auction from Rs 6,091 crore to Rs 2,900 crore, ET Telecom has reported, saying it has seen a copy of the letter.
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Also Read: Indian Govt Not Keen to Raise Its Stake in Vodafone Idea, Asks to First Raise Investments: Report
Vi Proposes Alternatives to Cover Payment Shortfall
In a letter to DoT on March 10, Vi reportedly highlighted its inability to furnish the Rs 6,091-crore BG or pay Rs 5,493 crore in cash to cover a payment shortfall from the 2015 auction. The telco has suggested some alternatives to the government to address the securitisation requirement, including offsetting this shortfall against excess payments made in past auctions or cash deposits furnished towards regulatory compliance, citing Rs 9,900 crore from 2016 and Rs 8,800 crore from 2012 and 2014 auctions.
“…the company has been in discussion with DoT on surrendering some spectrum it acquired in auctions conducted prior to 2021. Based on the proposal shared by the company, the overall spectrum obligation would reduce by Rs 4,800 crore, out of which the (reduction in) spectrum obligation for the March 2015 auction is expected to be Rs 3,200 crore,” Vi wrote in the March 10 letter to DoT secretary Neeraj Mittal, according to the report.
Also Read: Vodafone Idea Says It Can’t Furnish Rs 6,051 Crore BG: Report
Vi Highlights Existing Securitisation Options
In its letter, Vi also noted that it has already provided DoT with BGs worth Rs 5,800 crore for various regulatory matters and deposited Rs 2,450 crore in cash during the internal restructuring of erstwhile Vodafone Group entities in December 2015. This brings the total to Rs 8,250 crore—exceeding the required securitization for the 2015 auction. The company has urged DoT to consider these funds and refrain from taking coercive action.
