Telecom service provider Vodafone Idea Limited (VIL) has failed to meet the deadline for submitting a Rs 6,090 crore bank guarantee. According to the Department of Telecommunications (DoT) officials, the government will soon seek clarification from the telco for missing the deadline.
Vodafone Idea, country’s third-largest telecom service provider, had urged the DoT to exempt the bank guarantee amounting to Rs 6,090 crore. As a result, the company was required to deposit this amount with the DoT by tonight.
The bank guarantee is intended to cover a one-time partial shortfall in payments for spectrum acquired during the 2015 auction. According to an exchange filing by Vodafone Idea in February, the company's aggregate payments for spectrum auctions, excluding the 2015 auction, exceed the pro-rated value of the spectrum used. However, a one-time partial shortfall remains for the 2015 auction. The telco said that the DoT has asked for either a bank guarantee of Rs. 6,090 crore for one year or a cash payment of `5,493.2 crore by March 10, 2025, which is thirteen months in advance of the next installment.
Under the telecom reform package of 2021, the government eliminated the requirement for bank guarantees for spectrum auctions held after the reforms. In December 2024, the DoT further extended relief by waiving the bank guarantee requirements for pre-reform auctions (2012, 2014, 2015, 2016, and 2021), provided that the pro-rated value of spectrum used from the allocation date to three months after the next installment’s due date is less than the NPV of payments made. Prior to these reforms, Vodafone Idea was required to provide bank guarantees of nearly `24,800 crore for each spectrum installment, 13 months before the payment due date for the auctions mentioned above.