SC asks RCom to deposit 50 pc of increased spectrum usage charge

A three-judge bench headed by Chief Justice S H Kapadia also issued notice to DoT directing it to file reply over enhancing spectrum usage charge.

"The Operator - Reliance Communications Ltd will deposit fifty per cent of the outstanding principal amount net of interest in the Supreme Court Registry within a period of two weeks," said the bench, which also consisted justices K S Radhakrishnan and Swatanter Kumar.

It further said, "The balance fifty per cent of disputed outstanding amount net of interest will be secured by way of Bank guarantee of a Nationalised Bank to be given within a period of two weeks".

The apex court has directed to tag the Rcom and R Tel`s appeal with the other telecom operators -- Vodafone, Bharti Airtel, Bharti Hexacom (operating in Rajasthan), Idea Cellular and Uninor -- which have challenged DoT`s increasing the usage charges 3-8 per cent of adjusted gross revenue, depending on quantum of spectrum held by an operator.

It has also asked Managing Director of the two firms to "give an affidavit to the effect that, in the event of Civil Appeal being dismissed, it will pay the balance amount with interest".

Besides, it has directed RCom to file a chart of the principal amount, which is outstanding before the registry of the Supreme court within one week.

The court also warned, "We make it clear that if there is a breach of any of the afore-stated conditions, the impugned order will come into force with immediate effect".

The ADAG group firms are challenging the order of the sectoral tribunal TDSAT, which had declined to stay DoT`s hike in the spectrum usage charge.

The DoT had asked the two ADAG group firms to deposit Rs 94 crore for the spectrum charges as per the new rules

On October 22, the Supreme Court had stayed the TDSAT order upholding a hike in 2G telecom spectrum (radio waves) usage charges, but had asked Bharti, Vodafone and Idea to deposit with it 50 per cent of the proposed increase in fee with court`s registry.

Telecom service providers have to pay a percentage of their adjusted gross revenue (AGR) to the government as spectrum usage charge, which depends on the quantity of radio waves held by them.

The new charges vary between 3 and 8 per cent of AGR, from 2-6 per cent earlier.

As per new charges, an operator holding spectrum up to 4.4 Mhz will have to pay 3 per cent of the AGR compared to two per cent now.

Vodafone had to pay Rs 135 crore and the two Bharti firms have a joint liability of Rs 220 crore on account of enhanced spectrum usage charges.

On September 1, 2010, TDSAT had held that the decision to increase the charges was taken by DoT after following proper consultation process of the sectoral regulator Trai and mandatory approvals from the Telecom Commission and Group of Ministers.

Challenging the TDSAT`s order, operators have submitted that the tribunal had ignored Trai`s recommendation and the charge was increased "without any effective and timely consultation process" and was violative of the Trai Act.

They further submitted that Trai, in its recommendation on May 11, 2010, had disagreed with the enhanced 2G spectrum usage charge.