The Government of India confirms Private Operators will not be converted into PSUs just because they have given up part of their shares as Government equity. The Telecom sector lets out a sigh of relief.

With several reforms and sudden changes in the telecom sector, subscribers and operators are wondering alike whether the Government would take decisions about converting private telcos, especially Vodafone Idea into PSUs. Queries have today been put to rest as the Government has intervened to end the confusion.

A set of FAQs was also released as replies to the concerns raised on this matter.

In addition to Vodafone Idea, Tata Teleservices Ltd (TTSL)and Tata Teleservices Maharashtra Ltd (TTML) have also decided to convert their liabilities into Government equity.

Bharti Airtel has announced that the company would not be accepting the choice to give equity to the Government. Reliance Jio has also followed suit.

It has been made clear that despite the private telcos converting their shares into Government equity, they will continue as Private companies and there is no intention to convert them into Public Sector Units-PSUs. When required, the shares turned in to the Government by Vodafone Idea, Tata Teleservices Ltd (TTSL)and Tata Teleservices Maharashtra Ltd (TTML) would be sold to acquire the due amounts.

These three companies will not become PSUs. These three companies will continue to be managed as professionally run private companies,” the Government said.

Public Sector Units in The India Telecom Industry

According to the newest Government decision, the PSUs in the Indian Telecom Sector will be restricted to only two names as mentioned below:

• Bharat Sanchar Nigam Limited (BSNL)
• Mahanagar Telephone Nigam Limited (MTNL)

Government can sell these shares at appropriate time and thereby receive the amounts due.With the conversion of liabilities into equity/preference shares, the sector has got back the ability to invest and provide better services,” the statement released by the Government said.

Vodafone Idea decided to convert spectrum instalments dues and the interest from AGR(adjusted gross revenue) totalling ₹16,000 crores into Government equity. As a result, the Indian government will hold 35.8% of Vodafone Idea’s ownership.

TTML converted ₹850 crores (interest from AGR dues) into equity which gives the government 9.5% ownership in their company. Tata Teleservices Ltd (TTSL) has requested DoT on 12/01/2022 to convert around ₹4,139 crores to Government equity.