SC grants more time to DoT to reconsider Rs 40,000 cr one-time spectrum charges

The Supreme Court (SC) today agreed to grant more time to the Department of Telecommunications (DoT) to reconsider the levy of Rs 40,000 crore one-time spectrum charge. The Supreme Court (SC) observed that it is not expressing any opinion on the DoT’s move to reconsider the one-time spectrum charge. The next hearing in the case is scheduled for November 17.

The DoT wanted three weeks to reconsider continuing with its appeal against a telecom tribunal. The case pertains to a July 2019 ruling by a telecom tribunal, which had said a one-time spectrum charge (OTSC) could be levied prospectively, not retrospectively.

Also read: Supreme Court dismisses Vodafone Idea's plea against one-time spectrum charges

Since the DoT wanted to levy these charges retrospectively, it filed an appeal in the apex court. This dispute regarding OTSC has been going on between the Telecom Disputes Appellate Tribunal (TDSAT) and the DoT for a decade now. The biggest turning point in this battle came in 2019 when the TDSAT ruled that OTSC should be levied prospectively.

Meanwhile, the government today filed an affidavit before the SC, saying it's "reconsidering" the 40,000 crore one-time spectrum charge. The affidavit says telcos are losing money, and that it needs to prevent a situation where viability of they become "unsustainable".

A series of recent measures announced by the Union Cabinet has, however, given a major boost to the telecom sector. These measures include a four-year moratorium on AGR (adjusted gross revenues) dues, rationalisation of AGR, reduction in bank guarantee requirements against licence fee, increase in the tenure of the spectrum, and no spectrum usage charges (SUC) in future auctions, among others.

However, with regard to the spectrum usage charges, no immediate relief has been given. Meanwhile, after today's SC hearing, the stock price of Airtel surged significantly. Airtel share was trading at Rs 700.40, up Rs 19, or 2.79 per cent, on the National Stock Exchange (NSE).

Also read: No decision on telecom relief package in Cabinet meet