The department of telecommunications (DoT) has asked Vodafone Idea to either provide a bank guarantee worth Rs 6,091 crore for a period of one year or pay Rs 5,493 crore in cash for shortfall towards 2015 spectrum auction dues.
This comes after DoT granted a waiver of bank guarantee worth Rs 24,800 crore to Vodafone Idea for spectrum auctions held in 2012, 2014, 2016, and 2021.
Telecom companies were originally required to provide bank guarantees for their upcoming spectrum installment payments at least 13 months in advance (starting from October 2025). However, DoT has now relaxed this requirement for spectrum bought in auctions held in 2012, 2014, 2015, 2016, and 2021—but with a condition.
The condition is that the total amount already paid by the company (on a net present value basis) must be greater than the pro-rated value of the spectrum used. Vodafone Idea meets this condition for most auctions except the 2015 auction, where there is a shortfall.
For the 2015 auction, DoT has given two options – either provide a bank guarantee of Rs 6,091 crore for one year, or make a cash payment of Rs 5,493 crore by March 10, 2025 (which is 13 months before the next installment is due).
“The company continues to be in discussions with DoT and has requested to arrive at a solution for this requirement as envisaged in the telecom reforms package 2021,” Vodafone Idea said.
Officials said the government has already provided for a bank guarantee waiver. Any other relaxation, is highly unlikely at the moment.
As on December 2024, Vodafone Idea’s total debt was around Rs 2.3 lakh crore. Of the same, Rs 77,000 crore was AGR liability and Rs 1.4 lakh crore is the spectrum liability.
Vodafone Idea is also looking to raise about Rs 25,000 crore in bank debt. The company said it continues to engage with lenders for debt financing.
Over the next three years, the company has planned a capex of Rs 50,000-55,000 crore to improve its network and launch 5G.
“We are driving investments and the velocity of capex deployment is set to accelerate in the coming quarters. Concurrently, the phased rollout of 5G services is underway, targeting key geographies,” said Akshaya Moondra, CEO of Vodafone Idea.
“With our intensifying investments, we anticipate further improvement in both operational and financial performance,” Moondra added.
The company said its bank debt reduced by Rs 5,290 crore during the last one year and stood at Rs 2,330 crore. The cash and bank balance stood at Rs 12,090 crore billion as of December 31, 2024.
