The government is considering a lifeline for telecom companies through a moratorium on the mandated spectrum payments as part of a fresh set of measures to bolster the health of telcos. This comes at a time when Vodafone Idea, which is facing acute financial stress, has sent an SoS to the government, citing possible impact on its 270 million subscribers.
The telecom department’s move, if it goes through, will be an extension to the already running moratorium that was originally extended in November 2019 for fiscal years 2020-21 and 2021-22.
The bailout, if approved, will be for all telecom players and not just restricted to ailing Vodafone Idea, where key shareholder Kumar Mangalam Birla has appealed for a government intervention to ensure that the company remains a going concern. This would mean that any support will also be extended to other players such as Bharti Airtel and market leader Reliance Jio, and would be millions of rupees.
“The Centre is concerned about the health of Vodafone Idea and especially the fact that its further deterioration, or even collapse, may have a debilitating impact on their nearly 270 million mobile customers and the financial system. A moratorium on spectrum payments is one of the options being considered. However, nothing has been finalised as of now,” sources said.
Birla steps down as Voda Idea chairman
Kumar Mangalam Birla has stepped down as non-executive chairman and a director from the board of Vodafone Idea as the company battles for survival amid severe financial strain. Birla, who recently sought an urgent government package for bailing out the debt-laden company, will be replaced by trusted hand and telecom industry veteran Himanshu Kapania, who has been appointed as the non-executive chairman. Kapania comes in as a nominee of the Aditya Birla Group that has around 27% stake in the company.
“The board of directors of Vodafone Idea has accepted the request of Birla to step down as non-executive director and non-executive chairman of the board from August 4, 2021,” the company said in a regulatory filing. Besides, Sushil Agarwal, a nominee of Aditya Birla Group, has been designated as an additional director (non-executive and non-independent).
