Vodafone Idea slapped with Rs 26.83 crore damages by DoT over 2022 spectrum rollout

The company received the notice on Friday (July 31). In the stock exchange filing, Vodafone Idea said the demand covers “alleged default in compliance of minimum rollout obligations” for airwaves assigned under the 2022 sale.

The obligations flow from the Notice Inviting Applications 2022, the bid document for that auction. Operators that acquire spectrum must build out network coverage to specified levels within fixed timelines after assignment. The department has held that Vodafone Idea failed to meet those thresholds, resulting in the liquidated damages clause.

Vodafone Idea said it is reviewing the notice and evaluating the next steps in the matter. Those steps could include a legal or administrative challenge to the demand. The company has not said whether it intends to contest the amount or seek relief from the department.

The operator also said the notice will not have a material effect on its financial position. Day-to-day operations remain unaffected, according to the filing.

Shares of Vodafone Idea closed at Rs 13 on Friday, up 1.09%, before the disclosure. The stock has lost more than 11% over the past month.

2022 5G auction

The 2022 auction was India’s first sale of 5G airwaves and the largest spectrum sale the country has held. A total of 51.2 GHz of spectrum was sold in that round in August 2022, across the 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 3300 MHz and 26 GHz bands.

Vodafone Idea bought spectrum in a limited set of circles, trailing the volumes picked up by Reliance Jio and Bharti Airtel.

In the June 2024 auction, Vodafone Idea picked up 30 MHz of spectrum for Rs 3,510.40 crore, against Bharti Airtel’s 97 MHz for Rs 6,856.76 crore and Reliance Jio’s 14.4 MHz for Rs 973.62 crore. That round raised Rs 11,340 crore in all from 141.4 MHz of spectrum, and both Airtel and Vodafone Idea used it to renew expiring holdings in the 900 MHz and 1800 MHz bands.