Telecom service providers do not own spectrum: SC

ECONOMY – POLICY

14 FEBRUARY 2026

Supreme Court Ruling on Telecom Spectrum

• The Supreme Court of India has ruled that telecom service providers (TSPs) do not own spectrum and therefore cannot treat it as an intangible asset under the Insolvency and Bankruptcy Code (IBC).
• The court clarified that spectrum is a scarce natural resource, owned by the people of India, with legal title vested exclusively in the Union of India.
• The government holds it in trust for public benefit.

Key Legal Principles Laid Down

1. No Ownership by Telecom Companies
2. Telecom companies only receive a licence to use spectrum, they do not acquire proprietary rights over it.
3. Showing spectrum as an “intangible asset” in financial statements does not prove ownership.
4. A licence grants only a limited, conditional, and revocable privilege.
5. It remains subject to statutory rules and public interest.

•  Spectrum Cannot Be Treated as an Asset Under IBC
• Under the Insolvency and Bankruptcy Code, only assets owned by a corporate debtor can be included in insolvency proceedings.
• Since telecom companies do not own spectrum, it cannot be sold or transferred under IBC proceedings.
• It cannot form part of the liquidation estate.

• DoT Dues Are Not “Operational Debt”
• Licence fees and spectrum usage charges to Department of Telecom (DoT) are sovereign payments, not commercial debts.
• The relationship between the government and telecom companies is licensor–licensee, not creditor–debtor.
• Therefore, dues owed to the government are not operational debts under IBC.

Background of the Case

• The case arose from insolvency proceedings involving Aircel LimitedAircel Cellular Limited and Dishnet Wireless Limited
• These companies had obtained telecom licences from the Department of Telecommunications under Unified Access Service Licences (UASL).
• After defaulting on licence fees, lenders including the State Bank of India approached insolvency forums.
• In 2021, the National Company Law Appellate Tribunal had required dues to be cleared before spectrum transfer.
• The matter reached the Supreme Court through appeals.

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