Spectrum price: RCom gets relief from Supreme Court

The Supreme Court on Friday stayed a telecom tribunal order asking Reliance Communications to pay the difference between the price for spectrum in the 800 MHz band in 2013 and its auction price in 2015, as the company is in the process of selling part of its spectrum to Reliance Jio Infocomm.

A bench led by justice RF Nariman while seeking response from the department of telecommunications stayed the Telecom Disputes Settlement and Appellate Tribunal’s August 3 order that upheld the validity of Clause 8 of Guidelines for Trading of Access Spectrum by access service providers which meant RCom needed to pay the difference in the price of spectrum bought in March 2013 and its auction-determined price in 2015 if it is putting the spectrum for trading.

Sistema Shyam Teleservices had acquired spectrum in the 800 MHz in eight circles in 2013 which came at reserve price as there were no other takers for it. In 2015 auction the price of 800 MHz rose because there were other takers for it considering that it is used for 4G services.

After RCom announced acquisition of Sistema in 2015, the department of telecommunications (DoT) amended the relevant spectrum trading guidelines to add that the differential price needed to be paid if the spectrum is traded.

RCom had in May moved the tribunal seeking permission to sell its spectrum without having to pay an extra fee to the DoT.

“Clause No 8 of the trading guidelines is arbitrary and discriminatory in nature,” RCom said, adding the guidelines “puts the onerous obligation only on the (company) and not on any other service provider, thereby violating Article 14 of the Constitution of India”.

The appeal further stated that the trading guidelines also encumbers the rights of the firm to trade its spectrum, thus restricting its right to carry on its trade and business.

Stating that the classification at a belated stage sought to be applied is not based on any intelligible differential and does not promote the objective of the trading guidelines, RCom said that this amounts to unilateral rewriting of the contract between RCom and DoT for the allotment of spectrum. Besides, DoT had failed to seek recommendation from the Telecom Regulatory Authority of India on the issue.

RCom and its affiliate group companies — Reliance Infratel and Reliance Telecom — have already received the Supreme Court’s nod for the sale of their mobile business assets to Reliance Jio for Rs 25,000 crore. This will help it to cut down its debt of around Rs 45,000 crore.