Ministry matters

I did not pay anything to acquire shares of a TSP: Ministry of Communications

The Communications Ministry has published a list of frequently asked questions (FAQs) for telecommunications service providers (TSPs) and consumers on the telecommunications reform package. In these FAQs, the ministry addressed issues such as the conversion of certain government contributions into equity, the acquisition of shares, the impact of these measures on the telecommunications industry and the common man, as well as as the measures taken by the government to revive BSNL.

On the issue of converting certain government contributions into shares, the Communications Ministry has stated categorically that the Government of India (GoI) has paid nothing to acquire shares of a telecommunications service provider (TSP). He further noted that certain contributions payable to some of the TSPs are converted into equity or preferential capital in those companies on the basis of options exercised by them in accordance with the telecommunications reform package announced on September 15 of last year.

“As part of these reforms, TSPs have had the ability to convert certain interest expense owed to the government into shares or preferred shares in favor of the government. While some companies have chosen not to convert their liabilities to equity or preferred stock, three companies have exercised the option of converting their liabilities to equity or preferred stock. They offered this option to the government instead of their obligations. The government can sell these shares at the appropriate time and thus receive the amounts due, ”the ministry said.

“The telecoms sector has gone through a long period of litigation. As a result, all telecom companies have high amounts of liabilities which are due to various legacy issues. These legacy issues have put pressure on the Indian telecommunications industry. The telecommunications sector is vital to our society, especially in the post-COVID scenario. Consequently, the government approved numerous structural and procedural reforms in September 2021, ”added the FAQ from the Ministry of Communications.

He also mentioned that none of the three companies in question will convert to Public Sector Enterprises (PSUs) and will continue to be run as private companies run by professionals. But how will these changes help industry and users?

“With the conversion of liabilities into stocks / preferred stocks, the industry has regained the capacity to invest and provide better services. Companies also retain the possibility of investing so that telecommunications services can reach remote areas, ”the ministry said.

At the same time, the ministry also spoke at length about the government’s attempts to revive the MTNL and the BSNL. According to the document, these two power supplies lost market share and went into debt worth Rs 59,000 crore. The government has also taken several steps to ensure the survival of these power supplies, such as approving a Rs 70,000 crore stimulus and growth package for these power supplies, l allocation of funds to BSNL to acquire 4G spectrum and assistance to BSNL to provide broadband internet services to over 20 lakh households.

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