Telecom operators face the possibility of paying out another ₹25,000 crore to the government with the Supreme Court set to give a final hearing to the dispute related to one-time spectrum charge (OTSC) on Friday.

There have been 19 adjournments over the last four years. The matter will be heard by the bench headed by Justice MR Shah, who was part of the AGR bench then headed by Justice Arun Mishra.

The total OTSC liability on the operators is estimated to be ₹25,000 crore. Individually, Airtel and Voda-Idea have an exposure of ₹9,000 crore and ₹11,000 crore, respectively. RCOM and TTSL have OTSC liability to the extent of ₹2,000 crore and ₹1,800 crore, respectively.

A recap

The decision to levy OTSC was taken by the UPA government in the aftermath of the 2G scam. Prior to 2010, operators got 4.4 MHz spectrum bundled with licences and subsequent tranches came on achieving certain subscriber levels.

The government had contended that it was contractually bound to give only 4.4 MHz which came bundled with the licences and is free to charge for the additional spectrum allocated. In 2019, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) ruled that the DoT can only charge for administratively allocated spectrum to these firms beyond 6.2 MHz and not 4.4 MHz.

The telecom tribunal had also said this levy can charge only prospectively, that is January 1, 2013, the date on which the government notified this decision. There were reports that the government could withdraw the demand altogether given the financial stress in the sector. But this is yet to be made official.

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