The minister of state for communications Devusinh Chauhan has said that the government will return all bank guarantees provided by telecom operators. The telcos will be asked to refurnish bank guarantees of an amount equal to their next payable instalment 13 months before its due date.
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The government is planning to return the bank guarantees to the telecom operators for the dues pertaining to the 2012, 2014, 2015, and 2016 spectrum auctions. The telcos have already opted for a moratorium for payment on the dues related to these auctions.
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It was reported that the government was planning to return BGs worth about Rs 15,000 crore to Vi and those worth Rs 7,000-8,000 crore to Bharti Airtel. Chauhan further said that since both Vi and Airtel have opted for moratorium relief, they don’t have any instalment due in the next 13 months for a long-time.
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The Department of Telecommunications (DoT) had withheld these BGs submitted for payment for spectrum dues as guarantee against future adjusted gross revenue (AGR) payments in accordance with the Supreme Court’s direction in its AGR judgement.
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Vodafone Idea (Vi) will immediately be in a much better position if it gets Rs 15,000 crore back from the government. With all this capital, the telco will be able to increase its capex level or 4G and 5G to match what Jio and Airtel are spending on their networks. It will further give Vi more flexibility during the 5G spectrum auctions.
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On the other hand, Airtel is cash-flow positive, and with the return of BGs worth up to Rs 8,000 crore, it will be able to participate in the 5G spectrum auctions with a more freehand.
