SC grants brief reprieve on 3G roaming; Vodafone criticises ‘department of penalty’

9 Apr 2013

India’s Supreme Court has allowed Bharti Airtel, Idea Cellular and Vodafone India to continue offering 3G roaming until 11 April, when it will hold a detailed hearing on the matter. The apex court’s decision prevents the Department of Telecommunications (DoT) from taking any coercive action against the providers, delaying the watchdog’s plan to seek some INR12.5 billion (USD228.44 million) in related fines from the trio. Competing 3G provider Reliance Communications (RCOM) threw its weight behind the DoT, arguing that offering 3G services outside of licensed areas was ‘illegal and amounted to subletting 3G airwaves’, claiming that: ‘Without paying anything, Bharti Airtel was undercutting those who had paid thousands of rupees for getting licence and airwaves.’ The Economic Times writes that stocks in Idea Cellular and Bharti Airtel increased by 3.5% and 3.9% respectively in the wake of the court’s decision.

The DoT’s recent actions led a Vodafone official to term the regulator the ‘Department of Penalty’ yesterday. Referring to the developing trend of the watchdog imposing new charges on providers, Vodafone’s Resident Director (Regulatory Affairs and Government Relations) T. V. Ramachandran added: ‘Today when I read a paper, I am scared to read the headline on the business page, what new penalty can I be hammered with?’ The comment followed the revelation that Idea Cellular would be charged INR39 billion in relation to a corporate demerger dating back to 2009 under new tax avoidance rules and crests a wave of mounting frustration amongst providers at the regulators’ ‘self-contradictory and inconsistent’ approach to the sector in recent years.