Telecom firms Bharti Airtel Ltd, UK-based Vodafone Group Plc’s local unit and Idea Cellular can maintain until April 11 pacts allowing them to offer 3G services outside their licensed zones, the Supreme Court ruled on Monday.
The Department of Telecommunications (DoT) had asked Airtel, Vodafone and Idea to end the pacts, terming them illegal. It also imposed penalties on the companies.
The court will hear the case again on April 11.
The news sent telecom companies’ shares up 3-4% on the bourses. While Bharti ended up 3.9% to Rs. 281 on the Bombay Stock Exchange (BSE), it closed up 3.3% to R279 on the National Stock Exchange. Idea Cellular gained 3.6% to R107 and Reliance Communications rose 4.5% to R66 on the BSE.
The DoT had fined Bharti Rs. 350 crore for offering 3G services beyond permitted zones. It had also asked Vodafone India to pay a penalty of Rs. 550 crore and Idea Cellular to pay about Rs. 300 crore.
The SC order came on the backdrop of Bharti’s plea challenging Delhi High Court order upholding DoT’s directive.
RCom, too, has moved the SC opposing Bharti’s petition, alleging that Bharti was selling SIM cards illegally in seven circles where it does not own spectrum.
In its plea before SC Airtel has said that over 20 million subscribers would be affected if the roaming pacts were terminated. If the DoT order comes into effect, Airtel subscribers will not be able to use 3G services when they are travelling through or to a circle where the company does not have a 3G licence, the company told the SC.
Bharti had won 3G spectrum in 13 out of 22 telecom circles in 2010 through an auction and had entered into a quid pro quo agreement with other telcos which won spectrum in other service areas where it did not have spectrum to offer 3G services.