HC gives Bharti Airtel a breather on Rs350 cr fine demand

The Delhi High Court today gave a reprieve to Bharti Airtel, India's top telecom service provider, as it temporarily stopped the execution of a government order asking Airtel to immediately stop 3G mobile services in some zones.

Bharti Airtel had challenged a Department of Telecommunications (DoT) order to stop providing 3G services in seven zones where it does not own spectrum but is offering the services through pacts with other carriers.

The telecommunications ministry says such pacts are illegal, and has ordered Bharti Airtel to pay a penalty of Rs350 crore.

However would not need to pay the penalty immediately. The high court will next hear the case on 8 May.

In the auction of 3G airwaves in 2010, no single company managed to get spectrum in all of the country's 22 zones. Bharti Airtel, Vodafone and Idea had entered into mutual agreements to offer 3G services in circles where they could not bag 3G spectrum, and are currently offering 3G roaming services through such intracircle roaming pacts.

In October 2012 DoT had issued show-cause notices to Bharti Airtel, Vodafone India and Idea Cellular asking them to immediately stop offering 3G services in areas where each did not hold licences.

Bharti challenged the order  saying that the show-cause notice adversely affected the interest of its customers, who benefited from the 3G arrangements. It added that DoT's decision ''violated Article 14 (equality before law) as it was arbitrary, had no rational basis, was illogical and contrary to the contract between the parties''.