The Supreme Court on Monday stayed the TDSAT’s order directing the Centre to execute its order in a case related to levy of Rs 3,500-crore spectrum contiguity charges that Sistema Shyam TeleServices (SSTL) is allegedly liable to pay on account of the department of telecommunications (DoT) changing pre-existing auction rules. A bench headed by Justice Ranjan Gogoi also posted the matter for final disposal on December 6.
The Telecom Disputes Settlement and Appellate Tribunal had in March last year ruled that while the government was under no contractual obligation to allow spectrum contiguity, SSTL’s right to seek reconfiguration of its spectrum under NIA (notice inviting applications) remained intact and the government was contractually bound to allow contiguity to SSTL on the same terms as allowed to Reliance Jio Infocomm.
The telecom tribunal had struck down a Rs 3,500-crore spectrum contiguity levy imposed by the DoT on SSTL, saying the same rules need to be followed for all telecom operators. The case relates to the 800 MHz (megahertz) spectrum acquired by SSTL in the 2013 auction, in eight circles — Delhi, Gujarat, Tamil Nadu, Uttar Pradesh (East and West), Kerala, Karnataka and Kolkata. As per the NIA for that auction, winning bidders were allowed to rearrange exact frequencies amongst themselves, without any additional charge being levied.
After the auctions, SSTL applied for making the spectrum it won contiguous, which significantly increased the efficiency of the airwaves, and allowed the telcos to use newer communication technologies.
Rather than approving the application, the DoT changed the clause for the 2015 spectrum auction, saying that winning bidders would be charged the differential between the latest auction price and the auction where they won the spectrum, on a pro-rata basis for the remaining period of validity.
Sistema Shyam, the country’s sole pure-CDMA player, had disagreements with DoT on differential pricing of contiguous and non-contiguous airwaves in the 800 MHz band. This was after DoT cited a clause in the March 2015 auction rules and asked the company to pay an additional sum (about $610 million or `3,500 crore) to reconfigure its non-contiguous airwaves into contiguous or ‘continuous’ spectrum.
“By introducing clause 3.10 in NIA 2015, DoT has acted in an arbitrary and discriminatory manner and has attempted to defeat SSTL’s contractual rights under NIA 2013 with retrospective effect,” SSTL’s had said in its petition to TDSAT.
Subsequently, Sistema Shyam moved the tribunal, urging it to direct DoT to make its spectrum holdings contiguous. Previous auctions had allowed rearrangement of frequencies with other operators without an additional charge.
The TDSAT noted that the government had relaxed the differential pricing norm for other telecos and allowed it to convert its non-contiguous 800 MHz spectrum into contiguous airwaves in some circles. But it had questioned the government about why SSTL “should be treated differently”.