Not paid anything to acquire shares of any TSP: Communications Ministry

Ministry of Communications has issued a list of frequently asked questions (FAQs) for telecom service providers (TSPs) and consumers on the telecom reforms package. In these FAQs, the ministry has covered issues like conversion of certain dues to Government into equity, acquisition of shares, impact of these steps on the telecom industry and the common man and also the steps taken by the Government to revive BSNL.
 
On the issue of converting certain dues to Government into equity, the Communications Ministry has categorically said that the Government of India (GoI) has not paid anything to acquire the shares of any telecom service provider (TSP). It further noted that certain dues payable to some of the TSPs are being converted to equity or preference capital in these companies based on the options exercised by them in accordance with the Telecom Reforms Package which was announced on September 15 last year.
 
“As part of these reforms, the TSPs were given the option to convert some certain interest liabilities owed to the government into equity or preference shares in favour of the government. While some companies have opted not to convert their liabilities into equity or preference shares, three companies have exercised the option of converting liabilities into equity or preference shares. They have offered this option to government in lieu of their liabilities. Government can sell these shares at appropriate time and thereby receive the amounts due,” the ministry said.
 
“The telecom sector has gone through a long period of litigation. As a result, all the telecom companies have high amounts of liabilities which have arisen due to various legacy issues. These legacy issues have put the Indian telecom industry under stress. The telecom sector is vital for our society, especially so in the post-COVID scenario. Therefore, government approved many structural and procedural reforms in September 2021,” the Communications Ministry FAQ further said.
 
It also mentioned that none of the three companies in question will be converted into public sector undertakings (PSUs) and will continue to be managed as professionally run private companies. But how will these changes help the industry and the users?
 
“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,” the ministry clarified.
 
Meanwhile, the ministry also spoke at length about the Government’s attempts at reviving MTNL and BSNL. As per the document, both these PSUs have lost market share and saddled with debt worth Rs 59,000 crore. The Government has also taken multiple steps to ensure survival of these PSUs like approving a revival and growth package worth Rs 70,000 crore aimed at these PSUs, allocating funds for BSNL to acquire 4G spectrum and helping BSNL to provide high speed internet services to more than 20 lakh households.

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