The telecom services provider was expected to submit the first installment of past spectrum auction dues by September 20
The Union ministry of communications has issued a notice to Vodafone Idea (Vi) regarding non-payment of bank guarantees required to cover past spectrum auction dues. The move by the Department of Telecommunication (DOT) has come after Vi failed to submit bank guarantees on time for auctions conducted before 2022.
“We have written to Vodafone Idea to submit the bank guarantees...the bank guarantee was due in the second half of September, but the company has not submitted it yet,” the Economics Times quoted an official source as saying. The telecom company needs to submit bank guarantees worth nearly Rs 24,700 crore to the government in the coming months
The rules were changed after 2022, and according to the new rules, the companies need not provide bank guarantees for airwaves purchased. But since non-payment of bank guarantees is related to auction prior to the change in regulations, Vi is mandated to pay them.
Additionally, since Vi’s moratorium on the dues is set to expire in September 2025 and it mandates the submission of bank guarantees at least a year in advance to secure these payments. The telecom services provider was expected to submit the first installment by September 20.
The telecom service provider, which is struggling financially, has requested a waiver.
According to first quarter results of Vi in the financial year 2024-25, the company suffered a net loss of Rs 6,432 crore despite an increased 4G subscriber base. However, the net loss fell around 18 per cent from Rs 7,840 crore loss in Q1 of financial year 2024. Additionally, the total payment due to the government stood at Rs 2.09 trillion at the end of Q1, including deferred spectrum payment obligations of Rs 1.39 trillion.
Earlier in September this year, the Supreme Court gave a blow to the company as it dismissed the company’s curative petition, which sought the apex court to reconsider its 2019 ruling. The 2019 judgement upheld that India’s telecom operators including Bharti Airtel, will have to add non-core revenues while calculating their AGR. Additionally, the ruling ended a 14-year-long legal battle between telecom giants and the government. Reportedly, Vi owes nearly Rs 70,300 crore as AGR dues to the government.
Vodafone Idea shares fell over 6 per cent to hit 52-week low of Rs 8.90 on Monday following the ministry's notice. The stock has tanked over 30 per cent in last one month and 46 per cent on a year-to-date basis.