Telecom Sector Breathes: Historic Waiver on Bank Guarantees

The Union Cabinet waived the requirement for submitting bank guarantees for spectrum bought before 2022. This move alleviates financial strain on major telecom companies like Vodafone Idea, Bharti Airtel, and Reliance Jio. Vodafone Idea plans a Rs 55,000 crore investment to enhance services over three years.

The Union Cabinet has made a pivotal decision to waive the requirement for submitting bank guarantees on spectrum purchases made through auctions held before 2022, industry sources reveal.

This policy shift offers significant financial relief to Vodafone Idea, Bharti Airtel, and Reliance Jio. Particularly, Vodafone Idea, which is grappling with a debt of Rs 2.22 lakh crore, benefits immensely. The company had already missed the deadline to deposit a Rs 24,746.9 crore bank guarantee for spectrum payments scheduled between October 2025 and September 2026.

As part of ongoing telecom reforms, the government had previously eliminated the bank guarantee requirement for spectrum obtained from earlier auctions. This waiver empowers Vodafone Idea to secure debt facilities, which are crucial for their planned Rs 55,000 crore investment in network improvements, partnering with giants like Nokia, Ericsson, and Samsung.

(With inputs from agencies.)