MUMBAI: Another day, another Vodafone Idea financial hurdle. Akshay Moondra led telco, already walking a tightrope, has failed to submit a hefty Rs 6,090.7 crore bank guarantee or make a cash payment of Rs 5,493.2 crore to the department of telecommunications (DoT) for the 2015 spectrum auction shortfall, according to a report in The Economic Times.
The deadline? 10 March.
The result? No payment.
And now, the government isn’t exactly thrilled, “We will see what action can be taken in the coming couple of days,” an official privy to the matter told ET. In other words—brace for impact. The DoT has not granted any extension so far, keeping Vodafone Idea on tenterhooks.
The government had earlier attempted to throw the financially embattled telco a lifeline by waiving off bank guarantees (BGs) worth Rs 33,000 crore for past spectrum auctions across the private telecom giants—Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi). Out of this, Vi had been the biggest beneficiary, with Rs 24,800 crore in waivers. However, the fine print required Vi to still cough up cash or submit a BG for the 2015 auction, where it had a one-time partial shortfall.
Meanwhile, competitors Bharti Airtel and Reliance Jio had no such obligations, as their payments had already exceeded the pro-rata value of their spectrum use. Vi, however, was left holding the bag.
Now, what happens? The ball is in the government’s court.
With no payment in sight and no extension announced, DoT may be forced to take action. Will it demand strict penalties? Will it extend the deadline in an act of mercy? No one knows just yet. But for Vi, already struggling with debt and subscriber losses, another financial setback is the last thing it needs.
ET in their report mentioned that queries sent to Vodafone Idea remained unanswered at the time of going to press. Given the company’s track record, it’s anyone’s guess whether the telco will come up with the funds or find itself in even deeper trouble.
