Bharti Airtel banned from adding new 3G customers in 7 circles

Bharti Airtel was Thursday directed by the Supreme Court not to extend its roaming services to new customers in seven circles where it does not have licences for 3G spectrum.

Updated: Apr 12, 2013, 09:22 AM IST

New Delhi: Bharti Airtel was Thursday directed by the Supreme Court not to extend its roaming services to new customers in seven circles where it does not have licences for 3G spectrum.

However, the apex court asked the telecom department "not to take coercive steps" on Rs 350 crore penalty imposed on the telecom major for illegally providing intra-circle 3G roaming facilities.

Airtel has been accused by Reliance Communication Ltd and Department of Telecommunication (DoT) of providing 3G services to customers in circles where it did not have licence through "illegal subletting" of spectrum to 2G service licence holders.

The seven circles where Airtel does not have licences to provide 3G services are Kolkata, Madhya Pradesh, Haryana, Gujarat, Maharashtra, Uttar Pradesh East and Kerala.

The order will not impact the existing customer base of the company in these circles.

Before passing the order, the apex court said it was concerned that its direction should not affect millions of customers, including rickshaw pullers, who use mobile phones.

"There are hundred, thousand and millions of customers. Rickshawalas are also using mobiles. We don't wish to affect them," a bench comprising Chief Justice Altamas Kabir and Justice Vikramajit Sen said while issuing notices and seeking response of the Centre, DoT and Reliance Communication Ltd within two weeks.

The apex court said thereafter the respondents will file rejoinder within two weeks and posted the matter for hearing on May 9.

"In the meantime, Airtel shall not extend the facility (of intra-circle roaming service) to new customers in the seven circles where it does not have licences for 3G," the bench said adding that "no coercive steps will be taken on the basis of demand raised (by DoT) against the Airtel".

The bench also allowed Vodafone Group of Companies and Idea Celluar Ltd, which have pacts with Airtel to provide intra-circle roaming services, to be made parties in the case.
BSNL was also allowed to implead itself in the matter and the bench gave it permission to file its application.

Top law officers including Solicitor General Mohan Parasaran and Additional Solicitor General Paras Kuhat, appearing for the BSNL and the Centre respectively, defended the DoT notification to hold the 3G roaming pact of the telecom major as illegal.

Senior advocate Abhishekh Singhvi, appearing for Airtel, assailed the DoT's stand saying since the auction of 3G in 2010, till March 15, 2013, attempts were made to stay the intra-circle roaming but it went on without any stoppage.

Further till March 18, when a single-judge bench of the high court had stayed the operation of the DoT notification, Reliance Communication was not involved in the litigation, he said.

However, Reliance Communication preferred to appeal against the March 18 order and till April 4 when the division bench of the High Court decided the appeal, DoT was watching the development, he said.

"Reliance riding piggy-back on DoT is possible but for the first time I have seen DoT piggy-backing on Reliance," Singhvi said.

Opposing Airtel's contention, Kuhat said eight million new customers have been enrolled by the telecom major and it cannot be allowed to continue with them.

However, the bench interrupted him and said, "They (Airtel) would not go for new enrolment".

Senior advocate Mukul Rohatgi, appearing for Reliance Communication, said Airtel has illegal tie ups with Vodafone and Idea Cellular.

He said it was wrong on the part of the Airtel to say they don't require 3G licence for providing roaming service to its customers where Reliance and BSNL have such licence.

"The illegality committed by Airtel for three years cannot be allowed to be perpetuated," Rohatgi said.

The DoT had on March 15 issued a notification restraining Bharti from providing 3G intra-circle roaming facilities in seven circles where it did not have the spectrum and also levied penalty of Rs 350 crore (Rs 50 crore per circle) for allegedly violating licence terms and conditions.