Bharti Airtel will have to discontinue third generation (3G) services in areas where it does not have spectrum. The Chief Justice of the Delhi High Court on Wednesday vacated an earlier stay order against the Department of Telecom banning 3G services through an arrangement which allowed Airtel to ride on other operator’s spectrum. The court ruling came after Reliance Communications filed a plea challenging the stay order of March 18.
While the immediate impact of this will be on Bharti Airtel, the court order will be applicable to Idea Cellular and Vodafone India as well. The three operators had entered into an agreement 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. For example, in Madhya Pradesh neither Bharti Airtel nor Vodafone has 3G spectrum but both have subscribers. This is possible because the two operators entered into an agreement with Idea Cellular.
RCom’s plea
On March 15, DoT issued a notice to Airtel asking the operator to stop 3G services in 7 circles where it did not have 3G spectrum. This was challenged by Airtel in the high court where a single bench judge stayed the DoT order till May 8.
But arch-rival Reliance Communications filed a petition countering the stay order, stating that the 3G roaming arrangement was hurting its business. RCom had won 3G spectrum in 13 circles during the auctions held in 2010. The company said it was facing competition from all the three players for the same market, though they had not paid for spectrum in all the circles. For instance, in Kolkata, apart from Reliance, Vodafone and Aircel have 3G spectrum. But Airtel and Idea also sell connections through a deal with Vodafone, taking the number of 3G players from three to five.
RCom had earlier signed on a joint letter sent by five telecom companies including Airtel asking the Government to allow 3G roaming. At that time RCom was hoping that if roaming was legalised, it could also increase its footprint beyond the 13 circles. But with DoT disallowing it, the company found itself restricted to 13 circles while the big three players continued to ride on one another’s networks across the country.
Turnaround
The turnaround by RCom is significant because Anil Ambani-backed RCom is cosying up to Mukesh Ambani-controlled Reliance Jio, which is gearing up for a pan-India 4G launch later this year. Both 3G and 4G technologies are used to offer high-speed broadband access.
Once the roaming deal is 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. But Airtel is no mood to relent. “We will consider appropriate legal action,” said an Airtel spokesperson.