Don’t invoke Vodafone Idea bank guarantees: Lenders

MUMBAI: Vodafone Idea’s lenders met Department of Telecommunications (DoT) officials over the weekend, cautioning that invoking bank guarantees of the operator against statutory dues will lead to defaults since the telco is in no position to repay the banks. They urged the DoT to come up with a solution to retain a three-player telecom market.

“Lenders have informed the government that the situation is precarious as the sector is already reeling under asset quality issues. A default by Vodafone-Idea will not only require bank guarantee payments to be made to the DoT but will also be a burden on additional provisioning,” said an official who is aware of the matter.

“Bankers have requested the government to come up with a viable solution saying a three-telco model should be encouraged,” he added.