SC stays telecom tribunal’s order allowing hike in spectrum usage charge

New Delhi: The Supreme Court on Friday stayed the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) order upholding a hike in second generation (2G) telecom spectrum (radio waves) usage charges, but asked telecom firms Bharti Airtel, Vodafone, Idea and Bharti Hexacom to deposit with it 50% of the fee they would have otherwise had to pay.

Hearing an appeal filed by the GSM operators, a bench comprising Chief Justice Sarosh H Kapadia and judges K S Radhakrishnan and Swatanter Kumar stayed the telecom tribunal's order of 1 September 2010 which upheld the telecom ministry's decision to increase 2G spectrum usage charges. "Looking into the complexity of the matter and the stakes involved... we stay the impugned order passed by the tribunal," the court said.

It, however, directed Vodafone, Bharti Airtel, Bharti Hexacom (operating in Rajasthan) and Idea Cellular to deposit 50% of the proposed increase in fees with the Supreme Court registry within two weeks. It also asked the companies to furnish a bank guarantee for the rest of the 50% liability, PTI reports.

Telecom service providers have to pay a percentage of their adjusted gross revenue (AGR) to the government as spectrum usage charge. The charges vary between 3% and 8%, depending on the quantum of airwaves held by the respective operators.

According to the new levy, an operator holding spectrum up to 4.4 Mhz will have to pay 3% of the AGR compared to the existing 2%. Vodafone is required to pay Rs135 crore and the two Bharti companies have a joint liability of Rs220 crore on this account.

The court also directed that the managing director of each operator will file an affidavit before the court that in the event that their civil appeal is dismissed, the amount (deposited with the court) would be paid to the government. Warning the operators, the court said, "We make it clear if there is any breach of the impugned order that the effect of the interim order would cease."

On 1 September 2010, the TDSAT held that the decision to enhance the spectrum usage charges was taken by the Department of Telecommunications (DoT) after following the proper consultation from the Telecom Regulatory Authority of India (TRAI) and mandatory approval from the Telecom Commission and the Group of Ministers.

Challenging the TDSAT order, the operators said that the tribunal had ignored the fact that the TRAI's recommendation was "without any effective and timely consultation process" and violated the TRAI Act. "An expert committee has been set up by DoT to go into all issues relating to spectrum, including its pricing. The expert committee had contradicted the recommendations of TRAI," the operators said.

They also said that TRAI, in its recommendation on 11 May 2010, had disagreed with the enhanced 2G spectrum usage charges fixed by DoT. "TDSAT upheld the impugned order of 25 February 2010 and dismissed the petition filed by operators, primarily testing it from the point of view of the procedure followed by DoT. However, ignoring the vital facts clearly demonstrated no application of mind, breach of mandatory procedures and arbitrariness, discrimination and unilateralism," the operators said.
 

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