The Department of Telecommunications (DoT) has waived the requirement for Vodafone Idea (VIL) to submit bank guarantees for spectrum auctions held before the 2021 reform package. Announced on Saturday, this move is expected to boost investments in 4G and 5G networks in India, facilitating faster connectivity and improved services for millions of users.
Previously, VIL was required to provide bank guarantees amounting to ₹24,800 crore for spectrum instalments, submitted 13 months before the due date for payment. This change eases the financial burden on the telecom operator and allows funds to be redirected toward network expansion and technological upgrades.
In a statement to the Bombay Stock Exchange (BSE), VIL clarified that bank guarantees will no longer be needed for spectrum purchased in the 2012, 2014, 2016, and 2021 auctions. However, for the 2015 auction, a one-time partial shortfall is anticipated. This is due to the net present value (NPV) of payments being less than the pro-rated value of the spectrum used. VIL stated that discussions with the DoT are ongoing to finalise the exact shortfall amount.
The waiver is part of the broader telecom reforms introduced in 2021, which removed the need for bank guarantees for spectrum auctions held after the reform package. The latest decision extends this benefit to auctions conducted in earlier years, demonstrating the government’s continued support for the telecom sector.
“This step by the DoT shows the government’s commitment to strengthening the telecom industry,” VIL noted. “It ensures that banking resources can be better utilised by operators to expand 4G and 5G networks across India.”
The DoT confirmed the change in a communication dated 27 December 2024, applying specific terms and conditions to the waivers. This policy is expected to provide further relief to telecom companies, enabling them to focus on network development, innovation, and service improvement.
