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Apr 11, 2013 at 02:56pm IST

Airtel cannot acquire new 3G customers in unlicenced zones for now: SC

New Delhi: Bharti Airtel cannot add new 3G customers in seven zones where it does not own the airwaves and offers the services through pacts with other carriers, the Supreme Court said on Thursday, pending a final ruling in the dispute. Bharti can, however, continue 3G services in the zones for its existing customers, the court said, after hearing an appeal by India's top telecommunications carrier challenging a government ban on 3G pacts between carriers. The Supreme Court also said that no coercive steps will be taken on the issue of penalty raised against Airtel for allegedly illegally providing 3G services.

Bharti Airtel, Vodafone India and Idea Cellular currently offer 3G services outside their licensed zones through pacts with each other as no carrier managed to win the airwaves for all of India in a 2010 auction. The telecommunications ministry says the pacts are illegal. It had asked the carriers to end the pacts immediately and also imposed penalties on them.

On April 8, the Apex Court had directed the telecom department to not take any 'coercive action' against the country's largest mobile phone company Bharti Airtel till April 11. Last week, a panel of judges of the Delhi High Court quashed an earlier order of the court that had prevented the government from discontinuing Bharti Airtel's high-end services in seven regions Kolkata, Maharashtra, Gujarat, Haryana, Uttar Pradesh, Kerala and Madhya Pradesh and barred it from imposing a fee of Rs 350 crore. Bharti Airtel had appealed against the High Court's move.

No new 3G customers in unlicenced zones for Airtel: SC

Bharti Airtel can, however, continue 3G services in the zones for its existing customers, the court said, after hearing an appeal by India's top telecommunications carrier.

The Delhi HC was acting on a plea by Reliance Communications, which said that Bharti's move to provide pan-India 3G data services was negatively impacting its mobility business. Department of Telecom (DoT) has extended the crack down on 3G services last week when it asked the Indian arm of Vodafone and Idea Cellular to stop offering 3G services outside their licenced zones within three days, and slapped fines of Rs 550 crore and Rs 300 crore, respectively, on these companies.

The breather for Bharti Airtel bore positive news for Vodafone and Idea Cellular as well as the companies were able to continue offering their services till Thursday. The duo has appealed against the notices alongside Bharti Airtel in the Supreme Court.

Bharti Airtel, Vodafone and Idea won 3G airwaves in 13, 9 and 11 circles, respectively, in the 2010 auctions, and between them have a national footprint. 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. This enabled them to offer high-speed data services on a pan-India basis.

Bharti had about 7 million 3G customers as of December 2012, Vodafone has 2.5 million customers that use 3G while Idea has 4.1 million subscribers.

(With Additional Inputs From Reuters)