Tribunal overturns govt ban on 3G roaming pacts

NEW DELHI Tue Apr 29, 2014 1:30pm IST

1 of 2. A labourer works amid rolls of underground telephone cable pipes on the side of a road in Mumbai January 9, 2014.

Credit: Reuters/Danish Siddiqui/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - The telecoms tribunal has overturned a government ban on pacts between carriers that allow them to provide 3G services beyond their licensed zones - a decision that will help the firms expand high-speed data services faster and cut their capital expenditure.

The cost of purchasing 3G airwaves in a 2010 auction was so high that no single carrier won a nationwide permit. Bharti Airtel Ltd (BRTI.NS), Vodafone (VOD.L) and Idea Cellular Ltd (IDEA.NS), currently the country's top three carriers, entered into pacts with each other to provide 3G services beyond their licensed zones.

The telecoms ministry then banned the pacts, saying they enabled the companies to offer 3G services without buying permits.

The reasoning behind the tribunal's decision was not immediately known. A detailed judgement is expected later on Tuesday. In 2012, it had given a split verdict on an appeal by the carriers and last year the Supreme Court asked the companies to not add new 3G customers as the case continued.

"We are very pleased with ruling," said Rajan Mathews, director general of the Cellular Operators Association of India.

"Now that the legal matter has been cleared up, we are hoping that the government will allow us to go forward on this without any appeal to the Supreme Court or anything."

The telecoms ministry will make a decision on whether to challenge the decision in the Supreme Court after analysing the tribunal's order, Maneesha Dhir, a lawyer for the government, told Reuters.

India's telecoms carriers began launching 3G in 2011 and the premium services currently account for about 4 percent of their revenue. But 3G revenue is growing more than 70 percent annually, much faster than the dominant voice services, according to Naveen Kulkarni, a telecoms analyst at PhillipCapital.

"This is a significant long-term positive, helps in faster data growth and also reduces the long-term capex requirement," he said.

Telecoms stocks showed little reaction to the tribunal's ruling. Bharti shares were little changed. Idea's shares were up about 1 percent by 12:37 p.m. in a Mumbai market that was down 0.3 percent.

(Reporting by Devidutta Tripathy and Suchitra Mohanty; Editing by Edwina Gibbs)

FILED UNDER:

Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage