By R. Jai Krishna
NEW DELHI--India's Department of Telecommunications has ordered
Vodafone Group PLC's (VOD) local unit and Idea Cellular Ltd.
(532822.BY) to stop third-generation services by Monday in several
service areas where they doesn't hold bandwidth, a top government
official said Friday.
It also imposed a fine of 5.50 billion rupees ($100.3 million)
on Vodafone India Ltd. and 3.0 billion rupees on Idea Cellular,
said this official who didn't want to be named.
Vodafone India will have to stop its 3G services in 11 service
areas and Idea Cellular in 10.
A person with direct knowledge of the development at Vodafone
India and an executive of Idea Cellular confirmed the department's
order. They also declined to be named.
The order comes a day after a court lifted a stay on the
execution of a government order to stop Bharti Airtel Ltd.
(532454.BY) from providing 3G services in seven service areas where
it doesn't have bandwidth.
Bharti, Vodafone India and Idea Cellular in July 2011 entered
into agreements to share their 3G networks which allowed their
customers to use such services in areas where at least one company
has bandwidth. The telecom department later that year asked the
companies to end the pacts, which it said were against the
country's telecom law.
But the companies got a stay on that order from the Telecom
Disputes Settlement and Appellate Tribunal, which sorts out
litigations in the telecom sector. Last July, a two-member bench of
the tribunal delivered a split verdict on whether operators could
provide services in the areas where they don't hold bandwidth. This
allowed the department to revive the order.
On March 15, the department asked Bharti, India's largest
telecom company by number of subscribers, to stop 3G services in
seven services areas and pay a fine of 3.50 billion rupees. A judge
of the Delhi High Court stopped the execution of the government
order until May 8, but a two-member bench of the same court
Thursday lifted that stay.
The three companies together controlled more than half of
India's cellular telecom market of 862.62 million subscribers at
the end of January, according to data from the telecom regulator.
The number of their 3G users wasn't available.
The Idea Cellular executive and the person with knowledge of the
development at Vodafone India didn't say what action the companies
could take next.
Bharti has approached the Supreme Court Friday following the
Delhi High Court's ruling Thursday. The court is scheduled to hear
the case Monday.
The telecom department official said the three operators will
also have to terminate their network-sharing contracts.
Write to R. Jai Krishna at krishna.jai@dowjones.com
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