Bharti Airtel, on Monday, got a breather on offering 3G services, with the Supreme Court ordering a status quo on the issue.

The apex court has told the Department of Telecom not to take coercive action till the next hearing on April 11.

Airtel had filed a plea challenging the telecom department’s order asking the company to stop providing 3G services in seven circles where it did not have spectrum. The department had also imposed a penalty of Rs 350 crore on Bharti Airtel for alleged violation of licence terms.

Airtel had entered into an intra-circle roaming agreement with Idea Cellular and Vodafone to offer 3G services across the country using one another’s spectrum. This was because none of these players had won pan-India spectrum individually.

According to the DoT, though roaming is permitted, such an intra-circle arrangement cannot be used to sell 3G connections in areas where the operators do not have spectrum

Last week, the Delhi High Court, on a plea moved by Reliance Communications Ltd, had upheld the DoT’s order on Bharti Airtel.

Bharti Airtel’s counsel Abhishel Manu Singhvi said the arrangement for providing 3G roaming was legal as the telecom department, prior to auctions in 2010, had clarified that such pacts would be allowed for seamless 3G services to subscribers throughout India. Meanwhile, Vodafone and Idea Cellular also got a reprieve with the Delhi High Court asking DoT not to take any coercive action till Friday. DoT had slapped a penalty of Rs 550 crore on Vodafone and Rs 300 crore on Idea Cellular.

Counsel for Vodafone India and Idea Cellular C.S. Sundaram said that the order had been imposed by the telecom department arbitrarily without giving the two companies an opportunity to be heard

The case has major revenue implications for the three operators.

Implications

If the roaming deals are scrapped, Airtel’s data gameplan will be reduced to 13 circles, of a total of 22, Idea Cellular’s to 11 and Vodafone’s to 9. Earlier, the CEOs of the three companies had written to the Prime Minister threatening to exit 3G segment if they were not allowed to offer services through the roaming pacts.

thomas.thomas@thehindu.co.in

(This article was published on April 8, 2013)
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