Home >Companies >News >Delhi high court lifts stay order on Bharti Airtel 3G pact ban

New Delhi: The Delhi high court on Thursday set aside an earlier stay order by it on the Department of Telecommunications’ (DoT) directive banning Bharti Airtel Ltd from offering 3G roaming services in some circles.

After DoT on 15 March ordered India’s largest telecom service provider to stop offering 3G services in seven circles where it did not win spectrum in the 2010 auction, and to pay a 350 crore fine, Bharti secured an injunction on the order from a single bench of the Delhi high court.

On Thursday, a two judge bench headed by Delhi high court chief justice Darmar Murugesan set aside the stay and ordered that the parties were free to argue the case before the single judge bench. It is unclear whether Bharti will have to follow the DoT notice immediately or not.

The latest order came on an appeal by rival telecom service provider Reliance Communications Ltd (RCom)—a sign that the Indian telecom sector is reorienting itself into new polarizations, different from the GSM-CDMA war of the previous decade, as data services gain more importance, say analysts.

“One cannot deny it. The status quo is changing," said Kamlesh Bhatia, principal analyst, communications carrier operations and strategies, at researcher Gartner Inc. “And with 4G coming in just before the data explosion happens, one is going to see new interest groups or lobbies forming, with new ideas on the way assets should be shared or monetized and new policy decisions that should be taken by the government."

While Bharti has launched fourth-generation telecom services in some areas, RCom earlier this week signed an agreement to lease its fibre network to a Reliance Industries Ltd subsidiary to roll out its 4G services.

Asked if India’s telecom sector was reorienting itself in a manner similar to when GSM and CDMA companies were on opposing sides, Bhatia of Gartner said: “At that time, it was about different technologies and now its becoming about different groups fighting for greater share of the data market. The allegations and counter allegations will likely continue till a clear leader emerges."

The Thursday order came barely two weeks after Bharti Group chairman Sunil Mittal was summoned by a special court looking into the irregularities in the allocation of 2G spectrum. Mittal has moved the Supreme Court to quash the summons, which is expected to come up for hearing on Monday.

A Bharti Airtel spokesperson said the company was in full compliance of the 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 honourable Delhi high court and will consider appropriate legal action," the spokesperson said.

In July 2011, Bharti, Idea Cellular Ltd and Vodafone India Ltd announced that they had signed 3G roaming pacts with each other that enabled them to offer 3G services in circles where they did not win spectrum in the 2010 auction. The DoT subsequently ruled these pacts illegal as they amounted to spectrum sharing or mobile virtual network operations, both of which are not allowed by the government.

The main argument DoT has been using is that the operators’ licences, in the specific circles where they did not win spectrum, were not amended to allow them to offer high-speed wireless data services. Vodafone India and Idea Cellular are expected to receive similar notices from the Delhi high court.

Bharti shares fell to their lowest in four months at 273.75 on Thursday, down 2.46%, while the Sensex fell 1.55% to 18,509.70 points. The stock has been on a slide since Mittal was summoned by the special court.

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