Vi's missed bank guarantees trigger DoT notice amidst waiver talk

The notice was triggered after Vodafone Idea missed the deadline to submit bank guarantees for auctions held before 2022

Vodafone Idea (Vi) has received a notice from the Department of Telecommunications (DoT) for failing to submit bank guarantees tied to previous spectrum auction dues, according to a report by The Economic Times, citing inside sources.
 

The notice comes amid ongoing discussions between the DoT and the Finance Ministry about a possible waiver of the bank guarantee requirement, though no conclusion has been reached yet.

Vodafone Idea, a joint venture between Vodafone Group (UK) and India’s Aditya Birla Group, missed the deadline for submitting bank guarantees related to auctions held before 2022. The company was expected to submit these guarantees in instalments starting from September 20, but has not done so yet, triggering the notice.

“We have informed Vodafone Idea about the requirement to submit the bank guarantees, but the company has not complied. The due date was in late September,” an anonymous source told The Economic Times.

Vodafone Idea’s moratorium on spectrum auction dues will end in September 2025, and the company is required to submit bank guarantees at least a year in advance to secure these payments. Over the coming months, Vodafone Idea is expected to provide bank guarantees amounting to over Rs 24,700 crore.

Previously, Vodafone Idea had requested a waiver for these guarantees. Although auctions held since 2022 no longer require the submission of bank guarantees, older regulations still mandate them for spectrum bought in previous auctions.

An official stated that the DoT had initially declined the waiver request, as the requirement for bank guarantees was clearly defined in the notice inviting application (NIA) for the earlier auctions, which are binding on both the government and participating companies.

Despite this, the waiver proposal has been revisited, considering Vodafone Idea’s financial struggles and the reforms introduced in 2021, which modified the need for guarantees. Under these reforms, the 2022 and 2024 auctions did not impose a requirement for submitting guarantees.

If the DoT extends this waiver to previous auctions, major telecom operators like Reliance Jio and Bharti Airtel could also benefit.