Big relief for VIL as govt approves waiver of bank guarantees for telcos

In a move that could provide significant relief to Vodafone Idea Limited (VIL), the government has approved the waiver of bank guarantees for telecom service providers on spectrum purchased before 2022.

- RAKESH KUMAR

The government's decision will exempt Vodafone Idea, the country's third-largest telco, from submitting bank guarantees worth ₹24,700 crore for past spectrum auctions. The Cabinet has approved a proposal to waive the bank guarantees (BGs) that telcos required to provide for spectrum purchases up to 2022. This decision is expected to offer much-needed relief to major telecom service providers, which collectively owe over ₹30,000 crore in BGs to the government. Bharti Airtel and Reliance Jio will also benefit, though to a smaller extent. Airtel was set to submit BGs worth ₹2,300 crore, while Jio's requirement was around ₹4,000 crore. The relief will apply to bank guarantees associated with spectrum purchases made in auctions held