Government only an investor in telecom companies after conversion of liabilities: Vaishnav – World Affairs SRS

Government only an investor in telecom companies after conversion of liabilities: Vaishnav

– World Affairs SRS

Telecom Minister Ashwini Vaishnav said on Wednesday that current and future debt liabilities will remain with telecom companies, which have proposed to convert their interest dues into equity stake for the government.

Debt-ridden Vodafone Idea (VIL), Tata Teleservices and Tata Teleservices Maharashtra have proposed to convert the interest liabilities due to the government into equity.

The VIL board has proposed to allot 35.8 per cent stake to the government and around 9.5 per cent stake to Tata Teleservices Maharashtra.

Vaishnav told PTI in an interview, “The government will remain investor only. The companies will be run by professionals. All debt liabilities will remain the responsibility of the companies. The companies have given us the commitment.”

VIL has proposed to allot preference shares to the government at Rs 10 per share, which according to analysts is at a 58 per cent premium over the share price as on the relevant date of August 14, 2021.

If this plan is completed, the government will become the largest shareholder of the company, which is burdened with debt of about Rs 1.95 lakh crore.

Asked whether the responsibility of paying for the upcoming spectrum auctions would go to the government, Vaishnav said the entire responsibility of paying for radio waves would be with the companies and there would be no burden on the Centre.

He said the government has extended a helping hand as part of the telecom sector’s reform package to ease the burden on companies, save jobs as well as ensure healthy competition in the industry.

Vaishnav said, “We will exit the companies at an appropriate time. The government will not interfere in the day-to-day operations of the company. They will continue to be managed professionally.”

The Telecom Ministry in a statement has also clarified that the three companies will not become public sector firms after converting the outstanding interest to the government into equity stake.

Vaishnav further said that the state-owned BSNL has come under stress due to bad decisions taken by the previous government and is now in a better position.

“BSNL and MTNL are in a very good position now. They are in a much better position after we have offered them a relief package of around Rs 70,000 crore. We are working on providing more support to them,” Vaishnav said.

BSNL has sought Rs 40,000 crore from the government to set up a 4G network and repay the short-term loan.

The minister declined to comment on the financial details of the aid package for PSUs.

However, he added that the Center for Development of Telematics (C-DOT) has indigenously developed the 4G technology which will be deployed in the BSNL network.

Technically, it is a highly advanced system, he said.

Vaishnav said, “C-DOT is also moving from 4G to 5G development. Work has also started on development of 6G standards. In the coming years, we want India to lead the world in all these technologies. “

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is generated automatically from a syndicated feed.)

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