The department of telecommunications (DoT) has started returning bank guarantees (BGs) to telecom operators and so far, BGs to the tune of over Rs 9,000 crore have been returned to Bharti Airtel, Reliance Jio and Vodafone Idea. To start with, DoT has initiated return of BGs related to licence fees and spectrum charges, while spectrum auction-linked BGs will be returned shortly.
The regional centres of DoT are returning the BGs to telecom operators. “The Cabinet had approved lowering the requirement of BGs by 80%, so we are returning the excess BGs to the telecom operators. The process is ongoing and regional offices of DoT are engaged in it,” sources in DoT told FE.
Sources said, so far, Bharti Airtel has received Rs 4,000 crore worth of BGs back while the amount for Reliance Jio is around Rs 2,700 crore. Vodafone Idea has got over Rs 2,500 crore of BGs back from DoT.
As per industry estimates, BGs amounting to about Rs 35,000-40,000 crore have been lying with DoT against various statutory requirements. With the recent reforms, 80% of these BGs are expected to be returned to the operators. While there is no confusion around BGs related to licence fees and spectrum auction, BGs related to sub-judice matters like one time spectrum charges (OTSC) are also likely to be returned, after getting legal clarity.
While all the telecom operators are getting BGs back, the biggest beneficiary is going to be Vodafone Idea as it will free its line of credit from the banks.
In the revival package announced by the government in September, one of the measures was rationalisation of BGs, where in future there would be no requirements for multiple BGs in different licensed service areas and one BG will be enough. For future auctions, no BGs would be required.