Vodafone Idea Faces Fresh Setback as DOT Puts Spectrum Surrender Plan on Hold: Report

The Department of Telecommunications (DoT) has put on hold its proposal to allow telecom operators to surrender airwaves bought before the 2022 auctions, dealing a fresh blow to Vodafone Idea. The cash-strapped telco was hoping to return some spectrum to reduce its financial burden and secure bank guarantees, according to an ET Telecom report.

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Airtel and Jio Demand Refund Mechanism

The development follows concerns raised by Bharti Airtel and Reliance Jio, which demanded a provision for refunds if the surrendered spectrum had been fully paid for. Officials cited legal complexities in altering auction rules and adjusting refunds against other levies.

“The development came amid demands by Bharti Airtel and Reliance Jio that the government have a clause for the refund of the money that they have fully paid up for the spectrum bought before 2022 but could have now surrendered,” said officials aware of the matter, according to the report.

Vodafone Idea’s Plan to Cut Debt Hits a Roadblock

Vodafone Idea had planned to return excess spectrum bought before 2022 and cut its government obligations by Rs 30,000-Rs 40,000 crore, depending on the quantum of spectrum returned. However, officials reportedly said that allowing the surrender of spectrum would have involved a complicated process to change the rules of auctions conducted before 2022, which was also a deterrent.

“The conditions of notice inviting applications (NIA) would have to be changed for spectrum surrender. That, too, could have been considered, but then having the provisions for refund and adjustment against other levies would have been legally difficult,” the report quoted one official as saying.

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