Telecom sector giants, Bharti Airtel and Vodafone Idea (Vi) have received a huge legal and financial relief from the Bombay High Court. The court has completely rejected the ‘One-Time Spectrum Charge’ (OTSC) imposed by the Central Government. If we understand in simple words, the sword of huge liability which was hanging over the heads of these companies for many years has now been removed.
The court has made it clear in its strict decision that the government does not have the right to make any arbitrary change in the financial conditions retrospectively, years after the license has been issued. With this decision, not only will the companies get back their deposited bank guarantees, but a major uncertainty prevailing in the telecom sector for a long time will also end.
What is spectrum dispute?
This whole matter became heated after the famous 2G spectrum decision of the Supreme Court. At that time, the Department of Telecommunications (DoT) took a unilateral decision and decided that from July 2008, an additional fee would be charged from the telecom companies having spectrum of more than 6.2 MHz. The government’s argument was that the companies should pay a separate lump sum amount for the allocation of spectrum along with the spectrum usage charge. For this, the government had sent demand notices to the companies in 2012, which Airtel and Vodafone directly challenged in the court.
Companies gave strong arguments in the court
Airtel and Vodafone Idea’s stand in this matter was very clear. The companies argued that there is no provision in the Indian Telegraph Act, 1885 or in any of their license agreements that gives the government the power to impose any such additional charge retrospectively. Moreover, the companies were already following the revenue-sharing model under the National Telecom Policy (NTP) 1999. This means that whenever they were given additional spectrum, they paid the government in the same proportion by increasing their revenue share. In such a situation, this new one-time charge was completely unfair.
Rules cannot be changed midway
The division bench of Justice Manish Pitale and Justice Shriram V. Shirsat of Bombay High Court upheld the arguments of the companies 100 percent correct. The court said that the telecom license is a ‘contract’ in itself, and the government is also completely bound by its legal terms. The court made a very strict comment and said that ‘the rules of the game cannot be changed after the match starts.’ The government had tried to term this charge as ‘public interest’, but the court rejected it saying that merely filling the government treasury cannot be in public interest. For this, the court also expressed its clear disagreement with the old decision of Madras High Court in the Aircel case of 2016.
Meaning of this decision for the common consumer
Even though this matter was directly between the telecom companies and the government, it affects common mobile customers also. The court reminded that the main objective of the 1999 telecom policy was to provide affordable telecom services to the common people and improve network connectivity in rural areas. Now that the pressure of this huge fine has been removed from Airtel and Vodafone Idea, they will have more capital to improve their future technology and network. Airtel has also welcomed the decision and clarified that this step will give a huge boost to investment in the sector, the direct benefits of which will reach the customers in the form of better network and service.
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