Vodafone Idea and Bharti Airtel can benefit a lot from the government’s decision on the withdrawal of a one-time spectrum charge (OTSC). The private operators might have to pay Rs 2,000 crore each or something even lesser than that. The government is trying to reduce litigation from the sector and the withdrawal of appeal against a telecom tribunal verdict would mean that it is doing just that. Because of the continuous litigation, the only people who are benefitting are the lawyers. Both Vodafone Idea and Bharti Airtel were asked to pay thousands of crores as OTSC by the government.
Telcos Shouldn’t be Forced to Pay OTSC
The government should really not ask the telcos to pay OTSC right now. This would render the effect of the relief package somewhat useless in the very short term. Vi’s cash flow situation is really bad and it can’t just pay thousands of crores worth of OTSC to the government comfortably.
But as per an ET Telecom report, the Department of Telecommunications (DoT) has currently said that it needs three more weeks for consultations on the issue. Going to court with this issue would mean that the government is imposing litigation in the sector again. But if the DoT withdraws the appeal, it will mean that it is really backing the sector in a complete sense and wants to reduce the litigation.
At every turn in the telecom sector, the telcos and the government don’t agree on something and then go to court to resolve it. This might not be the best way to enhance the performance and stability in the sector. Understanding that; the government might just end up withdrawing its appeal and that would mean that the telcos will have to pay very little OTSC. The relief package has given a lifeline to Vodafone Idea, but OTSC might reduce its effects if the government stays persistent on recovering that amount from the telcos.