Centre preparing relief package for telcos, won't respond to KM Birla’s proposal: Report

Kumar Mangalam Birla aid that with a “sense of duty” towards 27 crore customers, the telecom giant is willing to hand over its stake to Public Sector Unit (PSU), a government entity or a domestic financial entity.

The Centre is “preparing a relief package” for the telecom sector but will not respond to Aditya Birla Group Chairman Kumar Mangalam Birla’s offer of stake handover in Vodafone Idea (Vi), The Economic Times reported.

An official told the paper there would not be “any immediate response” to Birla’s proposal, but the Centre was working on a relief package for the telecom sector that would be sent to the finance ministry by next week. An announcement to this effect can be expected by August-end, they said.

Moneycontrol could not independently verify the ET report.

“The telecom department is firming up a relief package to allow surrender of spectrum, reduce bank guarantees, phase out levies and prospectively define AGR to provide relief to the sector as well as Vodafone Idea,” the official added.

On August 2, CNBC-TV18 reported that Birla had written to the government saying that he was ready to “hand over stake” in Vi to a government entity.

In a letter to Cabinet Secretary Rajiv Gauba on June 7, Birla sought clarity on adjusted gross revenue (AGR), adequate moratorium on spectrum dues and floor pricing adding that without immediate and active government support Vi’s operations will be at an "irretrievable point of collapse".

But now senior officials told ET that the Centre has “no plans” of responding to Birla’s offer. One official noted that Birla’s letter was “surprisingly silent over Vodafone Group’s shareholding” even as the company is a majority stakeholder.

The official further said that Birla’s proposal suggests the government entity become a minority shareholder while Vodafone keeps majority. UK-based Vodafone Group Plc. owns 44.39 percent and Aditya Birla Group owns 27.66 percent stake in Vi.

“There has been no communication from Vodafone Group on the proposal so far and the government has also not sought any clarification. The government’s hands are full with the Rs 70,000 crore package announced for BSNL,” they added.

Vodafone Group and Aditya Birla Group did not respond to queries, the report added.