Telecom Operators Get Another Good News from DoT

According to the amendment note, the rule will not be applicable to any of the telecom operator who is under liquidation process. Regardless, this is a very good news for the existing operators in the market.

Highlights

  • The telecom operators had to provide up to Rs 220 crores as performance bank guarantee for each service of the telecom sector.
  • The telecom operators earlier used to provide Rs 44 crores as financial bank guarantee for each circle.
  • The relief measures announced a couple of weeks back along with the new bank guarantee rules will certainly help in uplifting the telecom sector in India.

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Telecom Operators

The Department of Telecommunications (DoT) has given the telecom operators yet another good news. Much recently, the government had announced the relief package for the sector. Now, according to a PTI report, the DoT is reducing the performance and financial bank guarantees (BGs) for the telecom operators by over 80%.




According to the earlier mandated rule, the telecom operators had to provide up to Rs 220 crores as a performance bank guarantee for each service of the telecom sector. However, that amount has now been trimmed down to Rs 44 crores. On top of this, the telecom operators earlier used to provide Rs 44 crores as a financial bank guarantee for each circle; but now, that amount has been trimmed down to Rs 8.8 crore as well. However, it is worth noting that this rule will now be applicable in cases where the BGs are subject to litigation or have been furnished due to any court order.

New Bank Guarantee Rules Won’t Apply to These Telecom Operators

According to the amendment note, the rule will not be applicable to any of the telecom operator who is under the liquidation process. Regardless, this is very good news for the existing operators in the market, especially for companies such as Vodafone Idea (Vi). Vi will now be able to invest its cash more freely into the networks of the company and also in developing new technologies for 5G.

The relief measures announced a couple of weeks back, along with the new bank guarantee rules, will certainly help in uplifting the telecom sector in India. This will help the operators in freeing up loads of cash so that they can clear dues as well as innovate more comfortably.

A tariff hike on top of all the relief measures announced recently will set things straight for the sector and the telecom operators, which will help India’s economy in a significant manner.

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