Cabinet Likely To Announce Relief Package For Telecom Sector; Might Take Some Stake In Vodafone-Idea


The government is reportedly planning to take some stake in the Vodafone-Idea to avoid duopoly in the telecom sector. Notably, the financial condition of the telecom operator is deteriorating every quarter due to growing debt and ongoing competition in the sector.

Cabinet Likely To Announce Relief Package For Telecom Sector

In addition, the government might covert the telco's debt into equity after a period of four years. In fact, there are high chances that the cabinet might take a decision today (September 15).

For the unaware, Vodafone-Idea has to pay Rs. 1.92 lakh crore of debt, where spectrum payment is close to Rs. 1.06 lakh crore, while AGR liabilities are close to Rs. 62,000 crores and dues of banks are close to Rs. 23,400 crores.

Government Might Not Invest In Vi

It is worth noting that the government has no plans to infuse funds into the firm. "There will be no infusion of funds from the government, only some of the dues which the company owes could be converted into the government's stake," a source was quoted by ET.

The report also said that the government does not want to run the operations of the company as the main reason behind is to help to improve the condition of the company.

"The government is not interested in running the company's operations--that is best left to the management. The idea is simply to help the telecom industry remain a three-player market," the person close to the development was quoted by the newspaper.

Vodafone-Idea Fails To Raise Funds

Notably, the telecom operator has tried its best to raise funds but did not manage to do that due to its financial condition. In fact, Aditya Birla Group has resigned from its position and written a letter to the government to inform the financial condition of the telecom operator. Kumar Mangalam Birla is also willing to give his 27.66 percent stake to the government.


The industry body COAI and all telecom operators have been looking for a relief package from the Department of Telecommunication. The financial condition of the sector is really bad and Vodafone-Idea might not be able to survive in the sector.

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