Bharti Airtel –Neutral- Angel Broking

In a major relief to Bharti Airtel, the Delhi High Court on Wednesday granted a stay on a government order asking the telecom major to stop offering 3G mobile services outside their licensed areas through roaming pacts. The Delhi HC has asked the department of telecommunications (DoT) to not take any coercive action until the next hearing of the case.

This effectively means that Bharti Airtel can continue to offer 3G services in the seven circles - Maharashtra, Madhya Pradesh, Kolkata, Uttar Pradesh East, Gujarat, Kerala and Haryana - where it does not have 3G spectrum, but offers 3G services through roaming pacts. The date for next hearing has not been decided. However, the court has asked Bharti Airtel to respond to the show cause notice issued to them by DoT within 60 days.

Bharti Airtel, on Monday, had filed a petition in the Delhi High Court challenging an advisory by DoT which asked the operator to stop intra-circle 3G roaming services within three days. In its plea, Bharti Airtel had sought quashing of the government's 28 September 2012 decision directing the service provider to stop providing intra-circle roaming (ICR) services and alleged that the decision is contrary to the interim orders passed by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

DoT had also indicated that similar notices would be sent to Vodafone and Idea Cellular. Though, both Vodafone and Idea are yet to receive notices from the DoT, the Delhi HC stay order augurs well for them as well. DoT had earlier ruled such pacts illegal in December 2011 and asked the operators to stop offering 3G services beyond their licensed circles through roaming agreements.

Though the operators paid higher prices for bagging 3G airwaves, but the uptake of the service remained, slow among the subscribers partly due to the high cost of such services. We maintain our Neutral on 

 telecom sector.

NITESH KUMAR

PGDM 1ST

MINTLIVE.COM