In Relief for Telecoms, Centre Willing To Reconsider Spectrum Charges

In a major relief for the embattled telecom companies, the centre is willing to "reconsider" one-time spectrum charges (OTSC) of Rs 40,000 crore levied on telecom companies. The Department of Telecommunications (DoT) has asked the Supreme 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 central government is desirous of reviewing and or reconsidering his decision to proceed with the present proceedings of appeal," the centre said in an affidavit filed in the top court. The Department of Telecom told the Supreme Court that the OTSC of Rs 40,000 crore will add to the financial burden of telecom companies. Most telecom service providers have incurred huge losses and the telecom sector is under stress despite the government's relief measures, it pointed out.,

The Supreme Court, on its part, has agreed to grant time to Department of Telecom to reconsider the one-time spectrum charge of levy of Rs 40,000 crore, while adding, "We are not expressing any opinion on the Department of Telecom's move to reconsider one-time spectrum charge. The top court will hear the case again on November 17.

One-time spectrum fees are charges that operators have to pay for holding radiowaves beyond a prescribed limit. Bharti Airtel has OTSC dues of Rs 8,414 crore and Vodafone Idea has pegged its OTSC accruals at Rs 4,389.8 crore, as of the end of March 2021.

The spectrum fees issue dates back to the year 2012, when the Supreme Court cancelled 122 telecom permits in wake of the 2G scam and declared airwaves as public goods to be distributed through an auction.

The government, thereafter, made it mandatory for all airwaves allocated beyond 4.4 Mhz to be charged at the prevailing market rates. Telecom companies were given 4.4 MHz spectrum, along with the pan-India licence, for Rs 1,658 crore. They were entitled for an additional 1.8 MHz on fulfiling certain subscriber-base conditions.

In November last year, the government decided that operators holding spectrum above 4.4 MHz will have to pay for the period between January 2013 and expiry of licences, and those holding spectrum above 6.2 MHz from July 2008 to January 1, 2013 will have to pay up retrospectively based on the market-determined price decided at the auction.

In a related development, the government had unveiled a slew of reforms for the telecom sector on September 15. These measures included allowing 100 per cent foreign investment in telecom through the automatic route and a 4-year moratorium for telcos to pay their adjusted gross revenue, spectrum and unpaid dues.