 "Ashwini Vaishnaw")
The present and future debt liabilities will continue to remain with telecom companies which have proposed to convert their interest dues 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 proposed to convert interest liabilities payable to the government into equity.
VIL board has proposed to allocate 35.8 per cent shares and Tata Teleservices Maharashtra around 9.5 per cent stake to the government.
"Government will remain an investor only. The companies will be run by the professionals. All the debt liabilities will remain responsibility of the companies. The companies have given us commitment," Vaishnaw told PTI in an interview.
VIL has proposed to allocate preferential shares to the government at Rs 10 per share, which according to analysts is at 58 per cent premium based on the share price at the relevant date of August 14, 2021.
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If the plan goes through, the government will become the biggest shareholder in the company which is reeling under a debt burden of about Rs 1.95 lakh crore.
Asked if the liability of payment for upcoming spectrum auction will shift to the government, Vaishnaw said the companies will have the entire responsibility for the payment of radiowaves and there will be no burden on the Centre.
He said the government has just extended an helping hand as part of the telecom sector reform package to lower the burden on companies, save and create jobs as well as ensure healthy competition in the industry.
"We will exit from the companies at an appropriate time. Government will not interfere in day-to-day operations of the company. They will continue to be professionally managed," Vaishnaw said.
The telecom ministry, in a statement, has also clarified that the three companies will not become public sector firms after the interest dues are converted into equity stake for the government.
Vaishnaw further said state-owned BSNL slipped into stress due to bad decisions taken by the previous government and it is now in a better shape.
"BSNL and MTNL are in very good shape now. They are in much better shape after we offered them relief package of about Rs 70,000 crore. We are working on providing further support to them," Vaishnaw said.
BSNL has sought Rs 40,000 crore from the government for setting up a 4G network and pay back short-term debt.
The minister declined to comment on financial details of the support package for the PSUs.
He, however, added that the Centre for Development of Telematics (C-DOT) has developed 4G technology indigenously which will be deployed 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 also started on development of 6G standards. In coming years , we want India to lead the world in all these technologies," Vaishnaw said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
