New Delhi, April 1 -- On Saturday, the government converted Rs.36,950 crore overdue spectrum charges from Vodafone Idea Ltd into equity, becoming the biggest shareholder in India's third-largest telecom operator with a 49% stake. The original promoters of Vi, Aditya Birla group and British telecom company Vodafone Plc., will own a 25.7% minority stake but will continue to be classified as its promoters.

The government's move not only saves Vodafone Idea from being branded a defaulter but also affirms the government's commitment to keep Vi a going concern.

Since January, Vi had lost 31% of its share value as investors had expected either a payment moratorium or surrender of spectrum, which, respectively, would only have either postponed ...