Months after writing a letter to the cabinet secretary highlighting the intention to handover his stake to the government, Kumar Mangalam Birla has stepped down as the non-executive chairman of Vodafone Idea (VIL). Himanshu Kapania, a nominee of the Aditya Birla Group, has been appointed as the new non-executive chairman.

Experts interpret Birla's decision to distance himself from VIL as a strategy to ring-fence the Aditya Birla Group from Vodafone Idea's issues. Vodafone Group has already ruled out infusing any further cash into the joint venture.

Sanjay Kapoor, a telecom consultant in an interview to CNBC-TV18, said that the government needs to view telecom sector as a horizontal to take a call on Vodafone Idea.

"For the government to take a call, which is outside the box, has to view telecom as a sector to be a horizontal and not a vertical. This is a sector which cuts across every business in the marketplace and everybody wants to go digital for thriving in their respective businesses for future. If the government wears a lens, which sees this business as a horizontal versus a vertical the decisions will come easy because government and the country depends on this business to stay globally competitive."

Kapoor said government will be the biggest loser if Vodafone Idea implodes. He said the government needs to convert the entire debt of VIL into equity and also push bankers to consider a similar move.

"The biggest loser in this will be the government of India because the maximum money is owed to them. If VIL implodes government still is a loser. So according to me one possible option that sits on the table is, can the government convert the entire debt into equity and also push bankers to consider a similar move? The government takes a board position on the company and have independents come on the board to run this company. Then the government only holds it to sell for future. So, if government is prepared to do that, then that could be a salvage."

Bahram Vakil, founding partner of AZB & Partners, said, "There are two options with the government, one is what Sanjay Kappor detailed and second is restructuring pre-bankruptcy or within bankruptcy. The advantage of bankruptcy is that you clear up all the debt, all the financial and operational debts, the government dues and the bank dues and you can do it in a very fast manner. In any service company, speed is really crucial because once the customers walk out of the door to get them back will be a mammoth task. So, if government, bankers sit and freeze the deal then you can move superfast because IBC gives you a moratorium."

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(Edited by : Bivekananda Biswas)