Beleaguered Vodafone Idea has converted the interest it owed on its spectrum and adjusted gross revenue dues into government equity, which gives the Indian government 35.8 percent stake in the Indian telecom provider and will become its largest shareholder, according to a report in the Economic Times of India.
It is the last government action that aided the ailing telecom operator. Last October, the Indian government deferred the payments for spectrum purchased by Vodafone Idea for four years, the Indian Express reported. Vodafone Idea benefited from the reprieve, which included elimination of the spectrum usage charge for airwaves acquired in future spectrum auctions.
Investors were less than pleased with the action as shares of Vodafone Idea plummeted nearly 19 percent in early trading Tuesday, according to the Economic Times, because the move will dilute existing shares in the company.
Idea Cellular and Vodafone India completed a merger in August 2018 to become Vodafone Idea, which made it the largest telecom company in India with 400 million subscribers at the time. But since then, it has lost 100 million subscribers to well-financed new market entrant Reliance Jio Platforms, according to the Economic Times, which has become the largest subscriber carrier in India.
By J. Sharpe Smith, Inside Towers Technology Editor
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