The government on Wednesday said the three telecom companies, namely Vodafone Idea Ltd. (VIL), Tata Teleservices Ltd. and Tata Teleservices (Maharashtra) Ltd. (TTML), which have opted to convert certain statutory dues into equity shares in favour of the government, will not become public sector undertakings.
“These three companies will not become PSUs. These three companies will continue to be managed as professionally run private companies,” the Department of Telecom (DoT) clarified in a statement, adding that the government can sell these shares at appropriate time and thereby receive the amounts due.
On the impact of the move on the industry, the DoT said the government’s reforms and support in times of a pandemic means that companies will be able to sustain their business.
“It will also stop a scenario where there are very few players in the market. Such potential lack of competition could lead to higher prices and poor services. Enough competition in the market safeguards the interests of the common man,” it said.
It further added that with conversion of liabilities into equity/preference shares, the sector has got back the ability to invest and provide better services. Companies also retain the ability to invest so that telecom services can reach far-flung areas.
Meanwhile, MD and CEO Ravinder Takkar said the government will not take a seat on the board nor will it manage VIL. On fundraising, he said “we hope to be back shortly to announce some of the fundraising process very, very soon.”
“I can confirm very very strongly that there is a huge interest from investors, especially international investors, in investing in India… they're interested not only in India, they're interested in the telecom sector and we have had interactions with several of them,” he added.