Vodafone Idea, Airtel, Jio Get Big Relief as Govt Waives BGs: Report

The union cabinet has reportedly approved the waiver of bank guarantees (BGs) submission by the telcos for spectrum bought before 2022. The government removed the need for the telcos to submit BGs for spectrum bought post-2022. This relief measure was introduced in the reforms package released in September of 2021. It allowed the telcos to improve their cash flow. Vodafone Idea Limited (VIL) had asked the government to get done with the BGs for spectrum bought before 2022 when they didn’t need to submit BGs for spectrum bought after 2022.

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Also Read: Any Relief on Bank Guarantees Will Benefit Entire Sector, Says Minister: Report

Notably, Vi defaulted on the payment of Rs 350 crore worth of bank guarantees due on November 1, 2024. The telco had communicated to the government that it is not in any position to pay bank guarantees for spectrum bought before 2022. Now, according to a report from CNBCTV18, the union cabinet has green-flagged the BG waiver proposal which will be a boost for the country’s telecom sector. While all the private telcos will benefit from this, Vodafone Idea will be the biggest beneficiary in the context of the situation in the market.

Read More – Vodafone Idea Defaults on Rs 350 Crore Bank Guarantee Payment: Report

Vodafone Idea Debt Funding “Might” Accelerate on the Back of this Decision from Govt

Vodafone Idea’s CEO, Akshaya Moondra, in the company’s recent investors call, said, “One of our representations to the government is that if it (bank guarantees) has been done away for future auctions, then why do we really need to keep it for past auctions? It should be done away as rational for doing away with the bank guarantees should be the same.