In a major relief for embattled telcos, the Centre has informed the Supreme Court that it is reviewing and reconsidering its decision on one-time spectrum charge (OTSC), which could impose financial liability to the tune of Rs 40,000 crore approximately on telecom companies, and it may not press for its appeal pending in court, while seeking three weeks’ time to take a final decision.
In a short affidavit, the Department of Telecommunication (DoT) under the Ministry of Communication, said the amount involved, which is the subject matter of adjudication, would be imposition of financial liability on various telecom service providers (TSPs)to the tune of Rs 40,000 crore approximately.
The DoT asked the top court for three weeks’ time to review its decision to penalise telcos – Airtel and Vodafone Idea – for a delay in paying one-time spectrum charges.
The Centre said the telecom sector is passing through a financial stress since sometime due to various circumstances and despite certain measures taken by the government in public interest, most TSPs providing mobile phones and broadband services have been making losses.
“The Indian Bank Association has also conveyed to the Central government in writing those adverse developments in telecommunication sector may lead to failures, vanishing competition, duopoly, unsustainable operations, and severe loss for the banking system which has a huge exposure to this sector,” it said in the affidavit.
Noting that the Centre is desirous of reviewing or reconsidering its decision to proceed with the present proceedings of appeal, the affidavit said: “The appellant prays for three weeks’ time so as to enable the Central government to take an informed decision whether to proceed with present appeal or not. The central government prays for adjourning the above referred group of appeals for the period of four weeks”.
The affidavit also cited decision taken by the Union Cabinet to encouraging competition amongst TSPs by preventing a situation where viability of some of the TSPs become unsustainable, resulting in a monopolistic situation and other adverse impact on the economy.
On Tuesday, the top court has agreed to grant DoT time to reconsider levy of Rs 40,000 crore one-time spectrum charge. A bench headed by Justice M R Shah noted that as a court concerned with larger public interest, it can’t allow waivers and posted the matter for further hearing on November 17.
The OTSC dues are based on DoT rules that require a telco holding spectrum 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.
Similarly, 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.
In July 2019, the Telecom Disputes Appellant Tribunal (TDSAT) ruled that the one-time spectrum charge could be levied prospectively, not retrospectively. The DoT then moved the top court, which refused to stay the TDSAT order.