The Department of Telecommunications (DoT) is likely to return bank guarantees (BGs) worth Rs 230 billion to telecom operators in connection with their outstanding adjusted gross revenue (AGR) dues. To this end, DoT is preparing a Cabinet note that will propose returning BGs to telcos. The note is under consideration and will be floated to various ministries soon and this could come up in the Cabinet by the end of the month or early April 2022.

Out of the aforesaid amount, Vodafone Idea Limited (Vi) is expected to get around Rs 150 billion. Similarly, Bharti Airtel has guarantees up to Rs 80 billion.

Earlier in the month of March 2022, Vi had reportedly asked the government to release Rs 150 billion in BGs, mentioning that the AGR and spectrum dues have been deferred by four years, and the DoT has the option to convert this into equity, there is no need to hold up the BGs for the same dues.

Further, the BGs return will boost the lenders’ capital pool, allowing a loss-making service provider such as Vi to get more loans as it plans to infuse capital in its 4G network to take on rival like Reliance Jio and check subscriber losses. Also, it requires funds to participate in the upcoming 5G spectrum auctions.