In a relief for telecom companies, the Centre has indicated before the Supreme Court that it may stop pursuing court cases to recover one-time spectrum charge (OTSC). The Supreme Court has deferred hearing on the OTSC case for November 17 as the Union Government sought time to reconsider and review its decision to recover OTSC dues from telcos, in view of the Cabinet’s September 15 decision to give a 4-year payment moratorium to telecom companies.
Though Justice MR Shah-led bench didn’t express any opinion on the Centre’s proposed move, it held that the Government’s stand must satisfy the court as the issue relates to “public money.” The bench observed that it is concerned with the larger public interest even if the government feels it unnecessary to pursue the case. Telecom companies owe over Rs. 40,000 crores to Centre as Spectrum Usage Charge (SUC), which includes OTSC. Bharti Airtel’s OTSC dues are Rs. 8414 crores, while Vodafone Idea’s OTSC dues are Rs. 4389.8 crores.
Noting that the telecom sector is passing through financial stress, Centre had referred to a written communication by the Indian Bank Association about adverse developments in the telecommunication sector which may lead to failures, vanishing
competition, duopoly, unsustainable operations and severe losses for the
banking system which has a huge exposure to this sector. Centre submitted that despite various measures taken in public interest, most telecom service providers for mobile phones and broadband have been making losses, which had prompted the Union Cabinet decision to promote public interest, protect government revenue and encourage competition among telecom service providers.
On 4 July 2019, the TDSAT (Telecom Disputes, Settlement and Appellate Tribunal) had ruled that the Union Government can only levy OTSC prospectively from 2013 on allocated airwaves beyond 6.2 MHz, which came as a partial relief for telecom companies. However, both the Centre as well as telecom companies contested the tribunal ruling in the apex court, which resulted in a status quo order passed on 7 December 2020. The top court had restrained the Centre from raising any demand and stopped the telecom companies from seeking OTSC refunds from DoT (Department of Telecommunications).
