October 21, 2021

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DoT amends voicemail, audio text and UMS license agreement for rationalisation of BGs

The telecom department on Wednesday notified the ammendemet of license agreement for voicemail, audio text and UMS license for rationalisation of bank guarantees (BG).

“With this license agreement shall be submitted for the amount of Rs 60,000 initially before signing license agreement, valid for one year from any scheduled bank or public financial institution, duly authorized to issue such bank guarantees to cover violation of license condition, and to ensure the performance under the license agreement, including compliance of instruction, issued by the Licensor from time to time,” said the Department of Telecommunications (DoT) . This amount was Rs three lakh earlier.

Earlier these BGs were renewed every year, or beyond expected date of commissioning of service, whichever is later, and shall be renewed from time to time till expiry of licenses as directed by the Licensor. But now DoT said that the BGs shall be maintained and kept alive, and kept valid by the licensee during the entire currency of the license agreement.

However, the licensor may increase the value of performance of the BGs whenever any demand is raised for non compliance of terms and conditions of license to the extent, it remains un-securitized by the existing BGs which shall be maintained till clearance of such demand by licensee.

These are steps by the government to ease the pressure from the telcos and BGs had long been a contentious issue between telcos and the government and even banks were getting jittery about renewing them given poor financials of telcos like Vi.

Dot has also sharply reduced the bank guarantees (BGs) operators need to furnish to the DoT during licensing agreements to 20% of the amount payable, bringing relief to telcos like cash-strapped Vi.

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