Idea Cellular Ltd will be the biggest beneficiary of the relief package for the telecom sector that was approved by the Union cabinet on Wednesday, analysts said.

The cabinet eased spectrum holding caps and extended the payment period for spectrum dues to 16 years from 12 years at present (including the initial two-year moratorium).

Idea, which is set to merge with the Indian unit of British telecommunications firm Vodafone Group Plc before mid-2018, will save an estimated $200 million in cash flows for the next two fiscal years, wrote Manish Adukia and Piyush Mubayi of Goldman Sachs (India) Securities Pvt. Ltd in an 8 March note.

“This figure, close to 22% of the company’s Ebitda (earnings before interest, tax, depreciation and amortization), will help stabilise its debt-heavy balance sheet. This (the extension of payment period) is likely to be particularly beneficial for Idea, which has a net debt-to-Ebitda ratio greater than seven as of the December 2018 quarter,” Adukia and Mubayi added.

The Aditya Birla Group-owned firm also stands to gain from the relaxation of spectrum holding norms since the previous regulations would have compelled the merged entity to give up 45.4MHz of excess spectrum holdings across all service areas.

This spectrum, in the band range of 900MHz and 2500MHz, is almost worth $800 million at current market prices, according to the Goldman Sachs note.

“We believe this (proposal to combine all sub-GHz spectrum bands together for calculation of 50% spectrum cap in any service area) could help Idea the most,” Adukia and Mubayi said in the note.

The merged entity was breaching the holding limit in markets such as Maharashtra, Gujarat, Kerala, Haryana and Uttar Pradesh (E), according to market research analysts at Deutsche Bank.

These geographies account for 32% of the total Indian mobile market and the ability to retain its entire spectrum aids its competitive position, they added in an 8 March note. The extension of the tenure for spectrum payments would lead to 30% lower annual instalments for the Idea-Vodafone union, benefiting the entity the most among the larger players and significantly aiding its medium-term cash flows, wrote Deutsche Bank analysts wrote in the note.

The new norms will also benefit other operators such as Bharti Airtel Ltd and Reliance Jio Infocomm Ltd, in addition to Reliance Communications Ltd and Aircel Ltd. The changes will help ease short-term liquidity pressures and strengthen spectrum footprints through acquisitions.

Bharti Airtel’s cash flows are also set to rise by an estimated $200 million for the next two fiscal years, wrote Adukia and Mubayi in the note, while adding that the relaxation of the spectrum cap could make it easier for smaller operators such as Aircel and Reliance Communications to sell their spectrum to incumbents.

A downside to the telecom reforms is a near 15% fall in the government’s budgeted revenue estimates from the sector for the fiscal 2019, wrote Parag Gupta and Amruta Pabalkar of Morgan Stanley in an 8 March note.