Bharti Airtel’s contingent liabilities arising from the demands raised by the Department of Telecommunications (DoT) have more than doubled between the financial years (FY) 2018-23, with the one-time spectrum charge (OTSC) dues being the largest component, according to report by IIFL Securities. The contingent liabilities have shot up from Rs 41 billion in FY18 to Rs 115 billion in FY23. According to a filing made by Airtel to Bombay Stock Exchange (BSE) in August 2023, the OTSC dues to DoT are estimated to be around Rs 151.78 billion, of which Rs 85 billion has been provided for and Rs 66 billion is kept as contingent liabilities. The OTSC case is a legal dispute between the government and telcos over statutory dues, with the matter pending adjudication in the Supreme Court and Bombay High Court.
Meanwhile, Vodafone Idea Limited’s (Vi) OTSC dues are estimated around Rs 70 billion. As per Vi’s filing in August 2023 to BSE over material litigations, the company’s total estimated OTSC dues to DoT are estimated at Rs 69.21 billion. However, the telco has not treated OTSC dues as a contingent liability, believing these charges to be not tenable. Whereas in its FY23 annual report, Vi revealed that its accrual towards OTSC had risen to Rs 56.44 billion in the end-FY23 from Rs 49.57 billion in end-FY22.
