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

Vodafone Idea (Vi) reportedly failed to pay its second bank guarantee (BG) of approximately Rs 350 Crore, due on November 1, for spectrum acquired in a 2012 auction. This comes after the telecom operator, India’s third-largest, missed a BG payment exceeding Rs 4,600 Crore in September for spectrum bought during the 2016 auction, ET reported, citing officials familiar with the matter.

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

Government’s Decision on BG Waiver Awaited

The Department of Telecommunications (DoT) is unlikely to take any penal action against the struggling telco until a decision is made on its proposal to waive BG requirements for spectrum auctions, the report added.

“The draft Cabinet note on the waiver has been prepared and circulated and it will be sent for approval soon,” an official was quoted as saying. Another official reportedly mentioned that the law ministry and the finance ministry are yet to reply on the note but it might still be sent to the Cabinet to take a final call on the matter.

Vi’s next BG payment is due in February. The company is required to submit a total of approximately Rs 24,700 Crore in BGs over the coming months for past spectrum auctions.

“The 2021 reforms package did away with the requirement to provide bank guarantees for spectrum acquired in future auctions. The industry through COAI has sought removal of bank guarantees requirements for spectrum acquired prior to 2022. We understand that this industry ask is being considered by the government,” a Vi spokesperson said in response to a query about the BG payments, according to the report.