If successful, the govt will be able to bring closure to all legacy issues
If the Department of Telecommunications is able to withdraw the case relating to one-time spectrum charges (OTSC) amounting to Rs 40,000 crore against the telecom operators, for which it is actively holding discussions with the law ministry, then it would be able to successfully bury legacy issues plaguing the sector.
The beneficiaries of this would be Bharti Airtel and Vodafone Idea as Reliance Jio is not a legacy operator. Sources told FE that the law ministry has given a favourable opinion to DoT; however, there are certain issues that need to be first settled.
The final progress on this front would be known on November 17 when the matter comes up in the Supreme Court. Last month DoT had sought three weeks time from the apex court as it wanted to reconsider the matter relating to OTSC as the telecom sector was passing through financial hardships. However, the court had said that DoT’s decision regarding withdrawing the matter must “satisfy the court” as it involves a question of “public money”.
The OTSC case dates back to 2008 and is pending before various high courts also apart from the SC.
The charge has been levied by the DoT on the operators for holding excess spectrum — beyond 4.4 Mhz — which is referred to as OTSC.
The decision to levy OTSC was taken by the United Progressive Alliance government in the aftermath of the 122 2G licences given by then telecom minister A Raja in January 2008. The licences were cancelled in February 2012 by the Supreme Court, but the furore it raised as these were given at 2001 rates of Rs 1,658 crore made the government decide to charge for spectrum given to the operators beyond the contracted amount through administrative orders.
Prior to 2010, operators got 4.4 Mhz spectrum bundled with licences and subsequent tranches came on achieving certain subscriber levels.
The government had contended that it was contractually bound to give only 4.4 Mhz which came bundled with the licences and is free to charge for additional amount allocated. Around that time most operators held either 6.2 Mhz or beyond, even 10 Mhz. The operators had opposed the move by the government to charge for excess spectrum, stating that since they paid higher spectrum usage charge for spectrum beyond 6.2 Mhz, so any OTSC was not legitimate. However, this was discarded by the government, which raised the demand.
In July, 2019, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had ruled that the DoT can only charge for administratively allocated spectrum to these firms beyond 6.2 Mhz and not 4.4 Mhz.
The telecom tribunal had said that this levy cannot be charged from a retrospective basis, that is 1.7.2008, when a decision to this effect was taken by the government but can charge only prospectively, that is January 1, 2013, the date on which the government notified this decision.
Last year, SC had refused to stay the tribunal’s order.