SC relief for Bharti, Idea & Vodafone in 3G roaming case

Written by feBureau | New Delhi | Updated: Apr 9 2013, 06:14am hrs
In a relief to Bharti Airtel and others, the Supreme Court on Monday temporarily allowed the Sunil Bharti Mittal firm to continue providing 3G roaming services till April 11. It also took note of the Centre's submission that no coercive action would be taken against the country's largest mobile phone company by revenues and subscribers till April 11, the next date of hearing.

The breather for Bharti Airtel will have impact on other telecos like Vodafone who have also been served penalty notices by DoT.

A bench headed by Chief Justice Altamas Kabir asked the parties to maintain status quo, which in effect allowed the company to continue 3G pacts with other telecos like Vodafone, who has sought its impleadement in the case.

Challenging the Delhi HC's last week's order that asked it to shut down 3G services within 24 hours in circles where the telco does not have its own frequencies to offer these services, Bharti Airtel's said that by amendment to the licence agreement of June 2008, the DoT has permitted mutual commercial agreements for inter-circle as well as for intra-service area roaming facility with other 3G service providers.

Senior counsel Abhishek Singhvi, appearing for Bharti Airtel, argued that the division bench in hyper urgency on the same day without considering substantial material had passed the order that has daffect on its 20 million subscribers, who have been getting 3G services for last two-and-a-half years, would be affected. The company stated that the roaming policy applied to licenses and not to spectrum bands.

The division bench of the HC had last week vacated the stay order granted to the company by a single judge bench on March 15 from stopping 3G intra-circle roaming in these seven circles. 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.

Supporting Bharti Airtel, Vodafone senior counsel Gopal Subramanium argued that such HC order has wider impact as it was also affecting the firm having a reciprocal arrangement with the Mittal firm.

Rcom opposed Bharti Airtel's plea saying that the company was selling SIM cards illegally in the seven circles where it does not own spectrum.

Senior counsel Mukul rohtagi, on behalf of Rcom, argued that these 3G pacts were illegal as it amounts to sub-letting. He further said that RCom had lost around R5,000 crore due to such illegal pacts and shutting down Bharti Airtel's services would not have any effect as its subscribers can go back to 2G services.

Bharti Airtel, Vodafone and Idea won 3G airwaves in 13, nine and 11 circles, respectively, in the 2010 auctions.

They subsequently entered into intra-circle roaming pacts with each other and rode on the airwaves of their partners in circles where they did not hold spectrum themselves.

The agreement allowed the companies to offer high-speed data services on a pan-India basis beyond their licensed zones or circles, which DoT says is illegal. March 15, the 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 (R50 crore for each circle) 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.

RCom had argued that 3G spectrum was given to only those successful bidders in the auction who paid the auction determined fee.

According to it, while other licensees like RCom have paid thousands of crores for the 3G spectrum, Bharti is using it for free in as many as in seven circles, therefore, disrupting the level playing field. "If this is allowed, then there is no requirement for any licensee to participate and purchase 3G spectrum in auction. This defeats the purpose of auction."

If Bharti is allowed to give 3G services in service areas where it has not acquired the 3G spectrum and hence, there is no necessary amendment and the authorisation to Bhartis License in these areas/circles, it would amount to amendment of the auction conditions after the auction is over in favour of one of the telecom operator at the cost and determent to all others, Rcom had argued in the HC.

This alters the level playing field against RCom who has paid thousands of crores and in favour of Bharti who has not paid a penny."

RCom stated that it had paid R7,237.34 crore for 3G spectrum on basis of the auction conditions that there would be only three or four 3G service providers in each circle and thus, it would have a reasonable market share of the subscriber base.