Government Rejects PSU Status for Vodafone Idea Amidst Financial Reshuffle

The Indian government has opted not to increase its stake in Vodafone Idea to avoid turning it into a public sector undertaking. After converting unpaid dues into equity, the government's share in the telecom firm stands at 48.99%. Challenges persist for Vodafone Idea, including debt management and subscriber stabilization.

The Indian government's decision to maintain its current stake in Vodafone Idea at 48.99% is aimed at preventing the telecom company from becoming a public sector undertaking (PSU), stated Communications Minister Jyotiraditya Scindia. With the government's refusal to expand ownership, Vodafone Idea remains responsible for its performance.

The equity conversion of Rs 36,950 crore in outstanding spectrum dues leaves the government holding just under half of the company. This move seemingly relieved immediate liquidity pressures but brings to light Vodafone Idea's ongoing structural issues, including subscriber base stabilization and debt management.

Meanwhile, the minister also highlighted the efforts to resolve MTNL's debts through land monetization. Bharat Sanchar Nigam Ltd (BSNL) has been lauded for turning a profit after 18 years, indicating a significant financial improvement, with plans to upgrade its network to 5G in the near future.

(With inputs from agencies.)