RCOM told to pay 50% of increased spectrum charge

2 Feb 2011

India’s Supreme Court has called on Reliance Communications (RCOM) and its wholly owned subsidiary Reliance Telecom to deposit 50% of the increased spectrum charge that has been requested by the Department of Telecommunications (DoT). According to India’s Business Standard, the three-judge bench headed by Justice SH Kapadia also directed the two companies to submit a bank guarantee for the remaining half of the money within the next two weeks, while it gave the regulator notice, requesting it file a reply over increasing the fees for spectrum usage. Further, the apex court has said that it will link RCOM’s case with similar appeals against the levy increase by other operators such as Vodafone Essar, Bharti Airtel, Idea Cellular and Uninor.

The decision is the latest in a long-running saga over the DoT’s decision to increase the cost of spectrum usage. As previously reported by CommsUpdate, in November 2010 the Supreme Court had stayed an order made by the Telecoms Dispute Settlement and Appellate Tribunal (TDSAT) which upheld increases in the charges for 2G spectrum usage. The ruling followed an appeal against TDSAT’s decision by three GSM operators – Bharti, Idea and Vodafone – that was prompted by the DoT’s February 2010 unveiling of revised spectrum charges for both GSM and CDMA operators; the regulator had proposed an increase of up to 50%, with the levy rising to between 3% and 8% of revenues. A month later, in March 2010, on the back of complaints over the proposals from a number of cellcos, the TDSAT stepped in and released an interim order halting the increase, which was due to come into force on 1 April, only for it to rule that the DoT had followed proper consultation from the Telecom Regulatory Authority of India (TRAI) in September 2010. The latter decision spurred operators to challenge the tribunal’s order, claiming that it had ignored the fact that the TRAI’s recommendation was ‘without any effective and timely consultation process’.

India, Reliance Communications (RCOM), Department of Telecommunications (DoT),

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