NEW DELHI: India's federal cabinet on Wednesday (Sep 15) approved a much-expected relief package for the country's cash-strapped telecoms sector, a senior government source said.
Shares in wireless carriers Bharti Airtel rose 5.4 per cent and Vodafone Idea were up 2.9 per cent at 8.16am GMT (4.16pm, Singapore time) on the news.
The so-called relief package, which is likely to include a moratorium on payments for airwaves, will help India's three major wireless carriers including tycoon billionaire Mukesh Ambani's Reliance Jio but especially the embattled Vodafone Idea.
The details of the package will be announced by ministers via a news conference later in the day.
The telecoms sector was shaken by Jio's entry in late 2016 with free voice and cut-price data plans.
Jio pushed several rivals out of the market, while others - such as the Indian unit of Britain's Vodafone and local Idea Cellular - were forced to regroup.
The sector was also hit by a Supreme Court ruling last year which forces carriers Bharti Airtel and Vodafone Idea to give in to a government demand for billions of dollars in dues which they have long contested.
Vodafone Idea has paid the government US$1.07 billion (78.54 billion Indian rupees) in telecoms dues, regulatory filings show, but still owes roughly 500 billion.
Banks led by State Bank of India have called on the government to give Vodafone Idea more time to clear its tax dues and airwaves' fees, Reuters reported this week.
Vodafone, which has a net debt of 1.91 trillion rupees, has previously raised serious concerns about its ability to stay afloat without government help. Its billionaire non-executive chairman stepped down last month.
Bharti Airtel has said it paid dues estimated at 180 billion rupees and government figures show it owes a further 259.76 billion.
Separately, the cabinet also approved a production-linked incentive scheme for the automobile sector, the source said, without giving details.