Union Cabinet approves waiver of bank guarantees for telcos

The Union Cabinet has approved a waiver of bank guarantees for telecom companies, marking a significant step toward easing the financial burden on the sector, with Vodafone Idea expected to be one of the key beneficiaries. The waiver applies to spectrum acquired by telecom operators in auctions held before 2022.

The Department of Telecommunications (DoT) had earlier proposed the move, responding to industry demands for relief. Telecom companies had written to the DoT, urging the removal of bank guarantee requirements for pre-2022 spectrum acquisitions.

This decision builds on the 2021 Cabinet reforms, which waived the need for bank guarantees on spectrum acquired prospectively. By extending this relief retroactively to older spectrum holdings, the government aims to alleviate financial stress in the telecom sector and bolster its stability. CNBCTV18