'Cabinet has waived the requirement of bank guarantees as per the relief sought by telcos,' a source said.
Credit: Reuters File Photo
New Delhi: The Union Cabinet has waived the requirement to submit bank guarantees for spectrum purchased through auctions held before 2022, according to sources.
The move brings huge relief to debt-ridden Vodafone Idea as it already crossed the timeline to submit Rs 24,746.9 crore bank guarantee for spectrum payment coming up between October 2025 and September 2026.
The decision will also provide relief to Bharti Airtel and Reliance Jio who have bought radiowaves through various auctions that were held before 2022.
"Cabinet has waived the requirement of bank guarantees as per the relief sought by telcos," a source said.
As part of telecom reforms announced in September 2021, the government has already waived the requirement of depositing bank guarantees for spectrum purchased through auctions.
Vodafone Idea CEO Akshaya Moondra in the company's earning call had said the bank guarantees will impact the company's ability to seek debt facilities from the banks which the firm requires for investment in networks.
Reeling under debt of Rs 2.22 lakh crore, VIL (Vodafone Idea Ltd) has announced a total investment of Rs 55,000 crore in the network over a period of the next three years to improve its services and arrest the decline in subscribers.
In September, the company roped in Nokia, Ericsson, Samsung for network expansion with an outlay of Rs 30,000 crore over a period of the next three years.