Airtel must end 3G pacts as HC vacates stay order

Written by feBureau | New Delhi | Updated: Apr 5 2013, 06:19am hrs
In a setback for Bharti Airtel, a division bench headed by the chief justice of the Delhi High Court on Thursday vacated the stay order granted to the company by a single judge bench on March 15 from stopping 3G intra-circle roaming in seven circles where it does not have spectrum. The vacation of the stay order followed a petition filed by rival Reliance Communications, which pleaded before the court that its business was getting affected by Bhartis move to provide roaming in circles where it does not have spectrum.

Bharti is likely to appeal against the order in the Supreme Court. Bharti Airtel has always maintained the highest standards of compliance. We believe the 3G ICR arrangements are in compliance with all applicable laws and licensing conditions. These arrangements are also hugely beneficial to customers and discontinuing these will cause grave inconvenience to them. We await a copy of the order of the Honble Delhi High Court and will consider appropriate legal action, the company said in a statement.

On March 15, the department of telecommunications (DoT) had sent Bharti Airtel a notice to stop offering 3G roaming in areas where it did not have spectrum within 72 hours. Airtel was also asked to pay a penalty of R350 crore for violating licence conditions by offering 3G services in seven circles where it did not win spectrum during the 2010 auctions. Airtel got a stay on the DoTs notice from a single-bench judge in the Delhi High Court on March 18, which allowed it to continue 3G services in circles where did not own spectrum until the next hearing, scheduled for May 8.

The case proceedings are keenly watched by the industry since Vodafone and Idea Cellular too offer 3G intra-circle roaming in circles where they do not have spectrum and the DoT is in the process of issuing similar notices to them. Though the division bench has lifted the stay order, the single-judge bench will continue to hear the case.

Interestingly, Idea Cellular too had won a stay order from the Delhi HC in a related matter. Idea, which had got fresh licences in seven circles after winning spectrum in November 2012 had moved the HC against DoT putting a clause in the licence conditions that it cannot provide 3G intra-circle roaming in these circles. The court has stayed this DoT action till further hearing.

Industry sources said the 3G intra-circle roaming case has become complicated and seems set for a long-drawn battle. The fight between mobile operators and the DoT over this issue is an old one in which no clarity emerged since even the Telecom Disputes Settlement and Appellate Tribunal gave a split verdict. However, a DoT committee has held that the arrangement between the operators is not one of roaming but actually of a mobile virtual network operator (MVNO) which is not allowed under the current telecom policy.

Intra-circle roaming is distinct from inter-circle roaming. Under it, an operator provides 3G services to its customers even in circles where it does not have 3G spectrum by sharing it with the ones which have. Since in the 2010 spectrum auction for 3G spectrum no operator won pan-India spectrum, they entered into intra-circle roaming pacts for pan-India coverage. The operators claim that they had sought written clarifications from the DoT over the matter before entering into such pacts and that the latters response was in the affirmative.

When DoT asked the three companies to stop such services in December 2011, they moved the TDSAT and got a stay order. In July 2012, the TDSAT issued a split verdict, with the then chairman Justice SB Sinha stating that such pacts were legal while the then member PK Rastogi termed them illegal. It did not help matters that a third member had retired and no substitute was appointed. Subsequently, in September, the DoT again sent notices to the companies to stop services. The firms moved the Delhi HC and got a stay. The court directed DoT to consider the replies of the companies to the notices and accord them personal hearings in the matter.

The circles where Bharti has been asked to stop such services are: Haryana, Maharashtra, UP (east), Kolkata, Gujarat, Kerala and Madhya Pradesh.