Govt will look at right opportunity to pare its stake in Vi: Telecom dept secy

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Vodafone Idea (Vi), Neeraj Mittal, secretary in the department of telecommunications, said as he welcomed the approval given by the cash-strapped carrier's board to a fund-raise proposal. "We'll have to examine everything, if there is an opportunity, there is a need for it, how do the next few months look like in terms of their operations," he said in an interview, adding that the government may not look at divestment immediately. The Union government is the largest shareholder in Vodafone Idea, India's third-largest carrier, with a 31% stake.

Mittal said the government was looking for growth in the carrier, and hoping the firm will be able to sustain operations. On Tuesday, the board of Vodafone Idea approved plans to raise ₹45,000 crore in equity and debt, including capital from its promoters. The loss-making telco said it will meet shareholders on 2 April to seek permission to raise ₹20,000 crore in equity, and complete the process by the end of the June quarter.

Following this, the company will look to raise debt, taking the total amount of funding to ₹45,000 crore. The carrier has a debt of over ₹2.1 trillion, most of it owed to the government from spectrum sales in the past years. Mittal said the department was looking at enabling mechanisms for surrender of spectrum, including 3G, which is being shut down by carriers.

"By 2030, we will need another possibly 1-2 GHz of additional spectrum. So this is a continuous process and if there is an opportunity for refarming or surrendering, we will definitely look at it," he said. Sector experts said surrendering of spectrum can significantly reduce telco liabilities, particularly for 3G spectrum, which was bought at steep prices and high interest rates.