Debt-ridden Vodafone Idea has asked the Department of Telecom (DoT) to waive a financial bank guarantee of Rs 24,747 crore for spectrum payments due in September 2025. This request is based on the requirement to securitize the annual installment a year before the payment date.
Details of the Request
A source, who wished to remain anonymous, stated, “Vodafone Idea has reached out to DoT seeking waiver for the financial bank guarantee (FBG) worth Rs 24,747 crore, which it has to pay in September 2025. The FBG needs to be deposited one year before the due date as per spectrum auction rules.” Vodafone Idea did not respond to an email query about this request.
Spectrum Payments and Moratorium
The payments are for spectrum purchased in auctions held before 2022. In 2022, Vodafone Idea opted for a four-year moratorium on spectrum payments under a government relief package. The moratorium for spectrum payments from auctions held until 2016 ends between October 2025 and September 2026. The company also chose a moratorium on adjusted gross revenue (AGR) payments, which ends in March 2026.
Basis for the Waiver Request
Vodafone Idea has cited spectrum auction rules from 2022 and 2024, which removed the requirement for providing bank guarantees for annual installments, as a basis for their request.
Outstanding Dues and Government Shareholding
As of March 31, 2024, Vodafone Idea had outstanding dues of Rs 2,03,430 crore to the government. This includes Rs 1,33,110 crore in deferred spectrum payments and Rs 70,320 crore in AGR liabilities.
Equity Offer and Reduction in Government Shareholding
The company had cleared about Rs 16,000 crore in interest obligations on the deferred payments by offering equity to the government. As a result, the government’s shareholding in Vodafone Idea decreased from about 33% in 2023 to 23.8% by March 31, 2024, after the company raised Rs 18,000 crore through a follow-on public offer and Rs 7,000 crore between March 2022 and May 2024 from promoters, and issued preferential shares to vendors to clear their dues.
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