SC Imposes Status Quo In One-time Spectrum Charge Case, Next Hearing In February


The Supreme Court on Monday imposed a status quo on fresh demand or recoveries between the government and Vodafone Idea in the one-time spectrum charge (OTSC) case.

Appearing for the government, Solicitor General Tushar Mehta sought a status quo in the case with no fresh demands or payments by any side either, and asked for an early hearing, given its significance, a proposal which Harish Salve, appearing for Vodafone Idea, accepted.

The Court said it will list the matter in February.

India’s telecom sector, in the efforts of enabling policies including more quantum of the spectrum, is set to establish new benchmarks in the next-generation network deployments and service delivery.

The OTSC dues are based on DoT rules that require a telco holding beyond 6.2 MHz/circle between July 2008 and December 31, 2012, to pay a one-time market-linked price for the excess spectrum held. Likewise, the telcos are required to pay the market price for airwave holdings beyond 4.4 MHz/circle between January 2013 till the expiry of their respective licences.

Airtel two quarters ago had made provisions of Rs 7,004 crore(US$ 948,866.97) in its exceptional item, mostly on account of OTSC dues. Vi had recognised Rs 3890 crore in its exceptional items in the March end quarter towards providing for OTSC dues.

The tussle started with the government’s decision to charge telecom operators OTSC in the wake of the Supreme Court cancelling 122 telecom permits in 2012, under the alleged 2G scan which declared airwaves as public goods which were best utilised through an auction.

The cabinet had then decided to levy an OTSC on telcos that were allocated spectrum along with pan-India licences at Rs 1,658 crore. Under the subscriber linked criteria followed previously, telcos were given additional tranches of spectrum after they reached a certain subscriber base in a circle.

However, the UPA II government then changed the policy and announced that all airwaves allocated beyond 4.4 Mhz will be charged for at a market rate.

But the telcos protested this move on retrospective dues. The matter went to Telecom Disputes Appellate Tribunal (TDSAT) which ruled in July 2019 that the OTSC could be levied prospectively, not retrospectively.

TDSAT had observed that demand for such dues needed to come with the option of surrendering spectrum. So while the demand notice of 2012, came in with dues retrospect from 2008, the option of surrendering airwaves was given only from 2012 onwards and not from 2008.

The DoT then moved SC and the highest court refused to stay TDSAT order.

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