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Telcos' Financial Obligation Liability To Stay Post Interest Dues Conversion Into Equity: Minister

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Debt liabilities of telecom companies will stay even after transforming interest amount into equityNew Delhi: Today and future financial obligation liabilities will continue to stay with telecom companies which have actually proposed to transform their interest charges into equity stake for the government, Telecom Minister Ashwini Vaishnaw said on Wednesday.

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

VIL board has actually proposed to assign 35.8 percent shares and Tata Teleservices Maharashtra around 9.5 per cent stake to the federal government.

Federal government will stay a financier just.

The companies will be run by the specialists.

All the financial obligation liabilities will stay duty of the business.

The companies have actually provided us dedication, Mr Vaishnaw said.VIL has actually proposed to assign preferential shares to the government at Rs 10 per share, which according to analysts is at 58 percent premium based upon the share rate at the relevant date of August 14, 2021.

If the plan goes through, the federal government will become the biggest investor in the company which is reeling under a financial obligation burden of about Rs 1.95 lakh crore.Asked if the liability of payment for upcoming spectrum auction will shift to the federal government, Mr Vaishnaw said the companies will have the whole responsibility for the payment of radiowaves and there will be no concern on the Centre.He said the government has actually just extended an assisting hand as part of the telecom sector reform plan to lower the burden on business, conserve and produce tasks along with guarantee healthy competition in the market.

We will exit from the business at a proper time.

Government will not interfere in daily operations of the business.

They will continue to be professionally handled, Mr Vaishnaw said.The telecom ministry, in a statement, has likewise clarified that the three business will not become public sector companies after the interest fees are converted into equity stake for the government.The telecom minister even more said state-owned BSNL slipped into stress due to bad decisions taken by the previous government and it is now in a much better shape.

BSNL and MTNL remain in excellent shape now.

They remain in better shape after we offered them relief plan of about Rs 70,000 crore.

We are dealing with supplying more support to them, Mr Vaishnaw said.BSNL has looked for Rs 40,000 crore from the government for setting up a 4G network and repay short-term debt.The minister decreased to comment on monetary information of the assistance package for the PSUs.He, however, added that the Centre for Development of Telematics (C-DOT) has developed 4G innovation indigenously which will be released in the BSNL network.Technologically, this is a highly advanced system, he said.

C-DoT is also moving from 4G to 5G development.

Work has likewise begun on development of 6G standards.

In coming years, we desire India to lead the world in all these innovations, Mr Vaishnaw said.




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