Vodafone-Idea Might Invest Rs. 10,000 Crores In Operations: Here's Why

Vodafone-Idea has reportedly assured the Department of Telecommunication that it will invest in the company. The telecom operator is likely to make an investment close to Rs. 10,000 crores in the firm. This development comes soon after the telecom ministry announced reforms for the sector.

The merged entity has not made any official announcement, but DoT officials believe that Vodafone-Idea will be in a better position after making the investment by the promoters of the merged entity, reports FE. The report said that the guidelines will be introduced soon so that companies can pay spectrum dues and interest components on AGR.

For the unaware, the telecom ministry has removed non-telecom items from the definition of the adjusted gross revenue. The government has also announced four years moratorium on spectrum dues. In addition, the ministry allowed spectrum sharing and surrender of spectrum for 30 years from 20 years.

"These reforms demonstrate the government's firm commitment to ensuring healthy growth of the industry. The measures also reflect the decisiveness of the Prime Minister, the Telecom Minister, and the government to address long-standing issues," Kumar Mangalam Birla, Chairman, Aditya Birla Group said.

Government Not Acquiring Stake In Telecom Companies

Meanwhile, Vodafone-Idea believes the government does not want to acquire a stake in any telecom operator. Notably, the Department of Telecommunication is already taking care of BSNL and MTNL. The ministry has already approved Rs. 69,000 crores package to help the telecom operators.

"I have had 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," Vodafone Idea Ltd (VIL) Managing Director and CEO RavinderTakkar.

It is worth noting that any other investment in the Vodafone-Idea will help the firm to sustain in the industry. Besides, the reforms introduced by the ministry are expected to help the sector as the increasing debt is affecting the growth of the health of the telecom industry. The government is yet to announce the full-fledged norms, which are expected to come soon.