Airtel, Vodafone Idea eye ₹24k cr relief after Bombay HC quashes govt's one time spectrum charges

IN a ease for telecom operators Bharti Airtel and Vodafone thought, the Bombay heights margaret court on mon quashed the government’s demand notices seeking one time spectrum charges (OTSC) over the levy on spectrum held beyond 6.2 MHz from 2008 onwards.In the 13-year legal battle, this ruling would potentially provide a total relief of over ₹24,000 crore to the companies. According to the FY25 annual report of Airtel, it had disclosed a contingent liability towards OTSC of ₹6,600 crore. Its total liability towards OTSC rose to ₹16,500 crore as of March end 2025, including the interest of ₹9,954 crore.Vodafone Idea’s exposure was at ₹7,581 crore, as per its FY25 annual report. It was not clear whether the amount includes the interest. The amount could rise based on the interest calculations.“This ruling marks an important milestone for India’s telecom sector by eliminating legal and financial uncertainty and creating a more supportive environment for future investments,” said an Airtel spokesperson, welcoming the ruling. Vodafone Idea did not respond to Mint’s queries until press time.Broader legal battle over OTSC pending before SCWhile the Bombay High Court has now quashed the demands against Airtel and Vodafone Idea, the broader legal battle over OTSC remains pending before the Supreme Court through multiple parallel proceedings.A division bench of Justices Manish Pitale and Shreeram V. Shirsat allowed petitions filed by the telecom operators and set aside the Centre’s decisions of November and December 2012, along with the consequential demand notices issued to the companies. The court directed that bank guarantees furnished by the operators in connection with the disputed demands be returned. It also quashed all consequential actions taken by authorities.“We have come to a conclusion that the petitioners have been able to make out a case in their favour seeking quashing and setting aside of the impugned decisions and consequent demand notices,” the court said. “The respondent has not been able to justify the said decisions and its action of levying one-time spectrum charge retrospectively upon the petitioners.”What is the dispute?The dispute dates back to 2012, when the government decided to levy a one-time charge on spectrum holdings beyond the prescribed threshold. The Department of Telecommunications (DoT) subsequently raised demands on existing telecom operators for spectrum held beyond 6.2 MHz with retrospective effect from July 2008.Airtel and Vodafone Idea challenged the move before the Bombay HC in 2013, arguing they had already paid the licence fees, entry fees and spectrum use charges under their licence pacts and that the government lacked the authority to retrospectively impose additional levy years after spectrum allocation.The High Court had granted interim protection to the operators in January 2013, restraining the government from taking coercive action during the case pendency.The court observed that telecom operators had already been paying licence fees and spectrum usage charges under the existing regime and that the government failed to establish a contractual or statutory basis for introducing an additional retrospective charge for spectrum that had already been assigned.Rejecting the Centre’s argument that spectrum, being a scarce natural resource, justified the levy, the court held that while the government holds spectrum in public trust, it remains bound by the terms and conditions of licences granted to operators.It noted the state can’t retrospectively alter contractual financial obligations without clear authority.The DoT can challenge Bombay High Court’s ruling before the top court, which may have the final say on the issue, legal experts said.