Scrap bank guarantees to free up more working capital: Telcos to Trai

Kolkata: Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) have asked the sector regulator to abolish bank guarantees (BGs) of all shades to free up more working capital for the upcoming expansion of mobile broadband networks.

In their submissions to the Telecom Regulatory Authority of India (Trai) on a paper around rationalisation of BGs and service entry fees, the telcos have said BGs not only impose costs on operators but end up as a coercive tool that the Controllers of Communication Accounts (CCAs) in government use to settle apparent breach of contract conditions.

Carriers also don’t see a case for merging performance and financial BGs, calling them an inefficient and costly mode of securitising government dues.