Cabinet clears proposal to alleviate financial strain on telecom sector by waiving bank guarantees for spectrum acquired before 2022, relieving operators of over ₹30,000 crore liabilities.
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The Cellular Operators Association of India (COAI) expressed its support on Nov 26 for the Cabinet's decision to waive bank guarantee requirements for spectrum acquired by telecom operators before 2022.
This move is expected to significantly ease the financial pressure on telecom companies, which have collectively faced a liability exceeding ₹30,000 crore in bank guarantees to the government.
The Cabinet, in its meeting on Nov 25, approved the proposal to waive these bank guarantees, a critical step in alleviating the operational burdens on telecom firms such as Airtel, Vodafone Idea, and others.
This decision comes as a major relief to the sector, which has struggled with liquidity constraints and heavy financial obligations in recent years.
SP Kochhar, Director General of COAI, welcomed the move, saying, “This landmark decision will greatly reduce the financial burden on telecom operators in the country. While we are still reviewing the details, we are optimistic that this step will enhance cash flow, free up capital, and support further investments.”
COAI represents leading telecom operators including Reliance Jio, Bharti Airtel, and Vodafone Idea. The association noted that the waiver would not only improve cash flow but also unlock capital, allowing telecom companies to invest in expanding their networks and upgrading their technology to meet the growing demands of consumers.
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