Quick Note - India Telecoms - One-Time Spectrum Charge: Favourable ruling

Research evidence excerpt

Quick Note - India Telecoms - One-Time Spectrum Charge: Favourable ruling

Global Markets Research

9 June 2026India Telecoms

EQUITY: TELECOMS

One-Time Spectrum Charge: Favourable ruling Research Analysts

India Telecoms

Bineet Banka, CFA - NFASLQuick Note bineet.banka@nomura.com

+91(22)4037 4044TheBombayHighCourton8June2026setasidetheDepartmentof

Telecommunications'(DoT)one-timespectrumcharge(OTSC)demandsonBhartiAirtel Abhishek Bhandari, CFA - NFASL

andVodafoneIdea(Vi).Thisremovesalong-standinglegacyoverhangforboth abhishek.bhandari@nomura.com

operators. +91 22 403 74120

The decision is materially positive sentimentally and at the accounting level, although its

financial significance is more pronounced for Vi, in our view. Moreover, as it is a High

Court decision it can be appealed in the Supreme Court. Therefore, we do not expect

provision reversals to be booked immediately and we believe management might want to

ascertain the likelihood of a final favourable outcome.

In 2012, the government of India imposed a retrospective one-time spectrum charge on

spectrum holdings in excess of originally contracted limits from July 2008 onwards.

Operators resisted, arguing that altering their licensing contracts mid-term to apply fees

retrospectively was illegal. Both Bharti Airtel and Vodafone Idea challenged the levy,

contending that neither the Indian Telegraph Act, 1885, nor their licence agreements

permitted such a retrospective charge.

Bharti Airtel (BHARTI IN, Buy)

According to its FY25 Annual Report, against the original demand of INR84.1bn, Bharti

Airtel has already provided for a portion of the principal (INR18.1bn) plus accumulated

interest on it (INR99.5bn), for a total provision of roughly INR117.6bn on consolidated

accounts.