The government has no interest in owning or acquiring or running any telecom company, Vodafone Idea’s MD and CEO Ravinder Takkar has said, adding that the government has given an option to debt-ridden telecom firms to pay interest on dues through equity.
In an interview to PTI, he also said the government has made it “absolutely clear that they want three private players to remain. They want us to compete in the market. They want us to operate in a competitive manner”.
“I have had many, many interactions across various parts of the government leading up to this announcement (telecom reforms). In all my conversations, it is absolutely clear that the government has no interest in owning any other telecom company,” Takkar said.
The Union Cabinet recently cleared a relief package for the telecom sector, allowing 100 per cent foreign direct investment through the automatic route and also provided four-year moratorium on payment of spectrum dues by telcos.
Vodafone has total gross debt of Rs 1.91 lakh crore, excluding lease liabilities and including interest accrued but not due, as of June 30, 2021.
“Our intention is to pay back to the government and our business plan will reflect that part. But certainly having that option where that could be converted into equity is a bold move and in a way ensures that if the industry is not fixed, then the government will continue to support the industry for a longer period of time as long as it needs to be,” Takkar said.
According to the PTI report, some experts believe the government may end up holding a chunk (26 per cent to majority stake) in Vodafone at the end of the moratorium period, if the telco opts to pay cumulative interest or annual instalments by way of equity.
The government is already managing lossmaking telecom firms BSNL and MTNL which are yet to post profit after a relief package of around Rs 69,000 crore was granted to them in October 2019.
Also read: Telecom relief package: The government could and should do more