Vodafone Idea Limited (VIL) surged 3.35% to Rs 7.72, following the government's decision to waive off bank guarantees for spectrum acquired in past auctions.
The Department of Telecommunications (DoT) announced on December 27th that it would no longer require telecom operators to submit financial bank guarantees for spectrum acquired in auctions held in 2012, 2014, 2015, 2016, and 2021, subject to certain conditions.This move builds upon the 2021 telecom reform package, which already eliminated the need for bank guarantees in future spectrum auctions. The latest decision extends this benefit to past acquisitions.
Prior to this waiver, VIL was required to maintain bank guarantees amounting to approximately Rs 24,800 crore as collateral against its spectrum installments. While most past auctions are now exempt from this requirement, a minor one-time shortfall may be applicable for the 2015 auction. VIL is currently in discussions with the DoT to determine the final amount of this shortfall.
This government action demonstrates continued support for the Indian telecom sector, aiming to facilitate industry growth and development.
Vodafone Idea, a joint venture between the Aditya Birla Group and the Vodafone Group, is a major telecom player in India. It offers voice and data services across 2G, 3G, and 4G networks nationwide. The company possesses a significant spectrum portfolio, including 5G spectrum in key bands.
The telecom service provider's consolidated net loss narrowed to Rs 7,175.9 crore in Q2 FY25 compared with net loss of Rs 8,737.9 crore in Q2 FY24. Revenue from operations rose 2.01% YoY to Rs 10,932.2 crore in Q2 September 2024.
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