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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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.
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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.
"Hence, the total amount of Rs 8,250 crore (Rs 5,800 crore + Rs 2,450 crore) available with DoT is more than the securitisation required by it for the March 2015 spectrum auction," Vi said, as per the report.
Vi claimed in its letter that the total securitisation options available with DoT amount to Rs 26,950 crore (Rs 8,250 crore, plus the excess payments made in 2012, 2014 and 2016). "We sincerely hope and request DoT to consider the above options favourably" and not take any coercive action, it said, according to the report.
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Vi Seeks Government Approval for Equity Conversion
In a separate letter on March 11, Vi CEO Akshaya Moondra sought urgent approval for converting the telco's pending regulatory dues—including adjusted gross revenue (AGR) and spectrum payments—into government equity. If approved, this could increase the government's stake in Vi from 22.6 percent to 49 percent.
Vi faces a looming financial crunch, with regulatory payments set to surge after the AGR moratorium ends in September. It must pay Rs 29,100 crore by March 2026, rising to an estimated Rs 43,000 crore annually from FY27 to FY31. As of December, its AGR dues stood at Rs 70,000 crore, while its cash reserves were Rs 12,090 crore, the report further said.
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Government's Recent Relief
The government recently waived Rs 33,000 crore in BGs for all three private telecom operators—Reliance Jio, Bharti Airtel, and Vi—with Vi receiving the largest relief of Rs 24,800 crore. While BG requirements for auctions from 2012 to 2021 have been relaxed under specific conditions, Vi remains obligated to meet its outstanding 2015 auction payment.
