Govt has no interest in acquiring any telecom firm: Vodafone Idea CEO
The government has given an option to telcos to pay back interest on dues through equity and also conveyed that it has no interest in acquiring any telecom company, a top official of debt-ridden Vodafone Idea has said.
Vodafone Idea Ltd (VIL) MD-CEO Ravinder Takkar said it is clear the Centre wants the company to compete in the market and there should be at least three private service providers in the telecom sector.
“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 or acquiring or running any other telecom company,” Takkar said.
The Centre is already managing loss-making telecom firms BSNL and MTNL despite receiving a relief package of around Rs 69,000 cr in October 2019. Some experts contended the government may end up holding a “sizable” chunk (estimates varied from 26 percent to majority stake) in VIL at the end of moratorium period, if the telco opts to pay cumulative interest or annual instalments by way of equity.
“They (government) have absolutely made it 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,” Takkar said.
VIL had total gross debt of Rs 1.91 lakh crore, excluding lease liabilities and including interest accrued but not due, as of June 30, 2021. The debt comprises deferred spectrum payment obligations of Rs 1.06 lakh crore and AGR liability of Rs 62,180 crore that are due to the government and debt from banks and financial institutions of Rs 23,400 crore.
The company had posted consolidated revenue of Rs 9,152.3 crore during the April-June period and the finance cost was Rs 5,228.4 crore.
According to Jefferies, the 4-year moratorium on payments will offer VIL cashflow relief and “could lead to the government taking up sizable stake in VIL.”