Vodafone Idea Limited (Vi) has approached the Department of Telecommunications (DoT), proposing the possibility to surrender certain spectrum acquired prior to 2021 in order to significantly reduce its bank guarantee (BG) requirement for airwaves purchased during the March 2015 auction. According to the operator, this move could bring down the securitisation requirement from Rs 60.91 billion to Rs 29 billion.
Facing continued financial strain, Vi conveyed to the DoT that it is not in a position to provide the Rs 60.91 billion BG or pay Rs 54.93 billion in cash to address the pending shortfall related to the 2015 spectrum acquisition. This is the sole remaining securitisation obligation from that auction for the telecom firm as of now.
To ease the burden, Vi has proposed several options for the government’s consideration. These include adjusting the shortfall against previous overpayments or existing BGs and cash deposits made towards regulatory compliance. The company has specifically cited an excess payment of Rs 99 billion made during the 2016 auction and an additional Rs 88 billion from the 2012 and 2014 auctions. Offsetting the 2015 dues with these overpayments, it claims, would lower its securitisation obligation to Rs 29 billion.
In its letter to the DoT, Vi further highlighted that it had already provided bank guarantees worth Rs 58 billion for various regulatory obligations. Additionally, the company had deposited Rs 24.50 billion in cash during the internal restructuring of former Vodafone Group entities in December 2015.
As a result, Vi argued that this combined amount of Rs 82.50 billion, comprising both BGs and the cash deposit, is more than sufficient to cover the current securitisation requirement of Rs 60.91 billion related to the March 2015 spectrum auction.
