Telecom Lead India: After Bharti Airtel, Vodafone India and Idea Cellular will be forced to stop 3G services in telecom circles, where they do not have any license.
According to Reuters, India’s telecommunications ministry has asked Vodafone Group’s local unit and Idea Cellular to stop 3G services outside their licensed zones and imposed penalty on both carriers.
The orders follow a similar directive to top mobile phone carrier Bharti Airtel last month, which the company is fighting in courts. Vodafone and Idea are also expected to challenge the government orders.
The Department of Telecommunications (DoT) has asked Vodafone India to pay a penalty of Rs 550 crore and Idea Cellular to pay about Rs 300 crore.
The dispute over 3G pacts is one of several regulatory challenges hurting carriers in the world’s second-biggest mobile phone market.
DoT had held illegal the roaming pact between Bharti Airtel, Vodafone and Idea Cellular, by which Bharti Airtel was providing 3G services in seven circles where it did not hold licence. The 3G spectrum auction was in 2010.
Meanwhile, India’s Supreme Court on Friday declined to hold an immediate hearing of a Bharti Airtel petition challenging the Delhi High Court ruling resurrecting the DoT order directing it to halt its 3G services in several circles.
As senior counsels Abhishek Manu Singhvi and Soli Sorabjee mentioned the matter before the court, the apex court bench headed by Justice RM Lodha said that Bharti Airtel’s plea challenging the Delhi High Court order would be listed in the mentioning list on Monday.
The division bench of the Delhi High Court, by its April 4 ruling, had vacated the stay of the DoT order by its single judge bench.
Despite the ongoing 3G related challenges Barclays, in its latest report, said increased revenue per minute and subscriber churn from smaller operators will assist telecom majors to post higher revenues and margins in the fourth quarter of fiscal 2012-13.
The report said reducing competition should have helped incumbents to show the first signs of a reversal in the declining revenue per minute (RPM) trend seen over multiple years. Usage should also improve on the back of a shift from smaller telcos. This should lead to revenue growth and margins on the back of positive RPM momentum in Q4 for Bharti, Reliance Communications and Idea Cellular.
