In a fresh development, the Department of Telecommunications (DoT) has filed an affidavit in the Supreme Court (SC) confirming that it has returned the bank guarantees (BGs) to Vodafone Idea (Vi) and Bharti Airtel. DoT had to return approximately Rs 15,000 crore to Vi and Rs 7,000-Rs 8,000 crores to Airtel in BGs.
The DoT has returned the BGs because the telcos have opted for a moratorium of four years on the spectrum dues pertaining to the previous auctions. Since there are no dues related to spectrum auctions in the short term, DoT returned the BGs so that money can be put to better use by the telcos.
Cash-strapped Vodafone Idea will be very happy because it has some funds now to boost capex levels to match Jio and Airtel as soon as possible. Vi recently raised funds via its promoter entities and is also looking to raise another Rs 10,000 crore from external investors.
Bharti Airtel and Vodafone Idea Will be Happy With Government
The telecom sector is the backbone of the economy as it facilitates connectivity and digital services at the core level. Bharti Airtel and Vodafone Idea will be happy with the move from DoT as the money served no purpose sitting with the government.
But the telcos will have to refurnish the BGs 13 months before the due date arrives for the next payment, which is still quite far from now. It is worth noting that the 5G spectrum auction is not far from here. Thus, this money released by the DoT will also aid the telcos in the spectrum auction, which is expected to involve thousands of crores.
The telecom sector is expected to flourish from the move, and it is a step from the government in the right direction. It is worth noting that nothing official has arrived from the concerned telecom operators regarding the return of bank guarantees by the Department of Telecommunications (DoT).
