Even though the telecom company Vodafone Idea is looking for an option to convert the outstanding AGR i.e. adjustable gross revenue into equity, but the government has no intention of converting it into a government company. Communications Minister Jyotiraditya Scindia has said this. Scindia has put a stop to all those speculations with its statement that the government is considering exceeding 49 percent of the existing share in Vodafone Idea.
Scindia has told CNBC-TV18 that there may not be equity conversion of more than 49 percent from the government in Vodafone Idea. This means that now the government will not take any further stake in the company in lieu of the outstanding AGR.
48.99% stake to the government in lieu of spectrum arrears of 36,950 crore
The Supreme Court has dismissed the plea for relief in the AGR arrears of other telecom companies, including Vodafone Idea, including difficulties. The company is now eyeing the government for relief. Earlier this year, Vodafone Idea gave the government a share in the company in lieu of spectrum dues of Rs 36,950 crore. This led to the company’s largest shareholder with 48.99% stake.
Scindia said, ‘Every telecom company has the right to offer a stake in the company instead of repaying the dues. But in every case, both the Department of Telecommunications and the Ministry of Finance, complete the process of duration. After that the decision is taken. Bharti Airtel has exercised this right. When the Department of Telecommunications fulfills its analysis, I will take a decision on Bharti’s request. “
If the government did not get help, then it will not be able to work beyond FY26
Vodafone Idea has said that without the support of the government on AGR, it will not be able to work further from FY 2025-26. He will have to knock the door of the National Company Law Tribunal (NCLT) for insolvency. Kotak Institutional Equities have said in their report that if there is no relief on AGR, it will be difficult for the company to get loans from banks. Vodafone and Idea merged in 2018. After that this company became Vodafone idea. Since the merger, this company has been constantly engulfed in difficulties.
Control of two companies in telecom sector is not good
Scindia also said in the conversation that it is not a good thing to have a monopoly or control of any two companies in the telecom sector. There are very few countries where there are 4 companies in the mobile telecom industry. The minister admitted that Indian telecom companies are different globally in terms of capital expenses i.e. capex. According to Scindia, only in India we are watching good returns on capital in the telecom sector.
