Airtel, Vi Get A Breather From ₹3,300-Cr Spectrum Charge

The Supreme Court on Friday refused to stay a Bombay High Court order that had quashed the Centre's demand for a one-time spectrum charge from telecom companies including Bharti Airtel and Vodafone Idea. The dispute involves around ₹3,300 crore, according to the Centre.

A Supreme Court bench issued notices to the telecom companies on the Centre's appeal against the High Court ruling. The government was represented by Additional Solicitor General Vikramjit Banerjee, while senior advocates Mukul Rohatgi and Shyam Divan appeared for the telecom companies.

The case relates to spectrum held by telecom operators beyond 6.2 MHz between July 2008 and December 2012. The levy was to be calculated using prices determined in the 2012 spectrum auction.

Why Is Centre Seeking Spectrum Charge?

The Bombay High Court had set aside a December 28, 2012 decision of the Department of Telecommunications (DoT) and the subsequent demand notices issued to telecom companies. It held that the retrospective levy did not have a contractual or statutory basis.

The Centre has challenged that decision in the Supreme Court and is seeking to revive the DoT's demand against the telecom operators. The Supreme Court's refusal to stay the High Court order means the relief granted by the lower court continues while the Centre's appeal is heard.

The dispute dates back to changes introduced under the National Telecom Policy, 1999, when telecom companies moved from a fixed licence fee system to revenue sharing. Between 2001 and 2007, the DoT and Telecom Regulatory Authority of India (TRAI) issued communications providing for recurring spectrum usage charges.

How Did the ₹3,300-Cr Dispute Begin?

TRAI recommended a one-time charge for spectrum held beyond 6.2 MHz for the first time in May 2010. The Union Cabinet approved the levy in November 2012, including a retrospective charge on spectrum held beyond 6.2 MHz from July 2008.

The DoT then issued its December 2012 order and demand notices to the affected operators. Bharti Airtel and Vodafone Idea subsequently challenged the move before the Bombay High Court in January 2013.

The High Court eventually ruled in favour of the telecom companies and quashed the DoT's decision and demand notices. It found that the retrospective levy lacked a contractual or statutory basis.

The Centre's appeal before the Supreme Court now seeks to overturn that ruling. The court's notice to the telecom companies is the next step in the legal dispute, which could determine whether the government can revive the ₹3,300-crore spectrum charge.