Centre to reconsider its decision of levying one-time spectrum charge on telecom companies

The Central government on Tuesday told the Supreme Court that it is desirous of reviewing or reconsidering its decision on levying the one-time spectrum charge on telecom companies, saying that the sector is passing through financial stress since some time.

The affidavit filed by the Secretary, Department of Telecommunications (DoT), Ministry of Communications stated that despite government measures, most Telecom Service Providers (TSPs) are suffering losses and a one-time spectrum charge (OTSC) would lead to a financial burden of Rs 40,000 crore.

The government also stated that it may not press for its appeal pending before the apex court and sought three weeks time to come to a final decision.

"It is required to be pointed out that the Telecom sector is passing through financial stress since some time due to various circumstances. It is submitted that despite certain measures taken by the government in the public interest, most of the Telecom Service Providers providing for mobile phones and broadband have been making losses," the affidavit stated.

A Bench headed by Justice MR Shah while taking into note the affidavit of the DoT agreed to grant time to reconsider the levy of Rs 40,000 crore one-time spectrum charge.

It asked Solicitor General Tushar Mehta appearing for the DoT about what will be the "consequences" of such a review by the government because it will have to "consider the larger public interest".

We are not expressing any opinion on DoT's move to reconsider the one-time spectrum charge, the Bench said while posting the matter for hearing on November 17.

The Department of Telecommunication in its affidavit further said that the Indian Bank Association has also conveyed to the Central government in writing those adverse developments in telecommunication sector "may lead to failures, vanishing competition, duopoly, unsustainable operations and severe loss for the banking system which has a huge exposure to this sector".

The amount involved, which is the subject matter of adjudication, would be the imposition of financial liability on various Telecom Service Providers to the tune of Rs 40,000 crores approximately, it stated.

The affidavit further added that the government took various decisions to encourage competition amongst telecom service providers.

"After taking into consideration several facts and keeping in mind public interest as dominant guiding light, the Central government vide decision dated September 15, 2021 taken by the Central Cabinet, took various decisions to "promote public interest, protecting government revenue and more particularly, encouraging competition amongst telecom service providers by preventing a situation where viability of some of the TSPs becomes unsustainable, resulting in an monopolistic situation and other adverse impact on the economy," it added.

It said that the decision is taken after inter ministerial consultations and examining the issue from various perspectives.

"In the context of the above-referred developments, facts, financial position and the implications of the potential result of the captioned appeal, the Central government is desirous of reviewing and/or reconsidering its decision to proceed with the present proceedings of appeal. It is submitted that considering the nature of the issues involved, this decision will have to be taken after the scrutiny at various levels which may consume some reasonable time," affidavit said while seeking three weeks' time so as to enable the Central Government to take an informed decision whether to proceed with the present appeal or not.

In 2012, the top court had cancelled 122 telecom permits in connection with the 2G scam, declaring airwaves as public goods best utilised through an auction.

The Cabinet had then decided to levy a one-time spectrum charge on telcos that were allocated spectrum along with pan-India licences at Rs 1,658 crore. Under the subscriber linked criteria followed previously, telcos were given additional tranches of the spectrum after they reached a certain subscriber base in a circle.

Later, the government changed the policy and announced that all airwaves allocated beyond 4.4 Mhz will be charged at a market rate.

The telcos protested this move on retrospective dues and approached the Telecom Disputes Appellate Tribunal (TDSAT), which ruled in July 2019 that the charges could be levied prospectively, not retrospectively.

The tribunal had said that demand for such dues needed to come with the option of surrendering spectrum. So, while the demand notice of 2012 sought dues from 2008, the option of surrendering airwaves was given only from 2012 onwards.

Challenging the TDSAT ruling, the DoT then appealed to the top court.

( With inputs from ANI )