After Voda Idea's call, bank guarantee waiver in works
Department of Telecommunications (DoT) has prepared a draft cabinet note seeking to waive the requirement of providing bank guarantees (BGs) for securitisation of deferred spectrum instalments, subject to some conditions, officials said. The move follows a request by Vodafone Idea (Vi) for such a waiver, they said.
“The BG waiver for next instalment, however, can only be considered if the telco agrees to pay an additional three months’ amount along with the annual payment,” said one of the officials, who did not wish to be identified. If the draft gets cabinet nod, there won’t be any requirement for BGs.
But the telcos will have to pay instalments for 15 months annually, with instalments for three more months acting as a security for next year’s payments. Therefore, while Vi has been calling for waiver of the BG requirement, the DoT proposal, if cleared by the cabinet, may see a higher annual outgo for the telco, which has been desperately trying to emerge from a cash crisis, said experts.
As per the DoT’s proposal, the waiver terms would apply for spectrum auctions of 2012, 2014, 2015, 2016 and 2021, subject to the companies agreeing to the terms, officials said. The moratorium for spectrum auction dues for Vi comes to an end in October 2025 and BGs have to be submitted 13 months before the next due date of payment.
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