The department of telecommunications (DoT) today asked Bharti Airtel to stop 3G services within three days in the seven circles it does not have the required licences.

Bharti had filed a petition against the decision in the Delhi High Court. The hearing is scheduled on Monday.

Bharti was offering these services in seven circles, where it does not have 3G spectrum, by signing intra-circle agreements with Vodafone and Idea Cellular. Bharti has also been asked to pay a penalty of Rs 50 crore per circle.

The seven circles are Haryana, Maharashtra, UP (East), Kolkata, Gujarat, Kerala and Madhya Pradesh



Bharti has 6.8 million 3G customers across the country (5.2 million are active). Industry experts said about 30 per cent of these subscribers might be impacted.

The telecom company offers 3G services in 13 more circles, where it has bought spectrum in the 3G auction. Subscribers in these circles will not be hit by the order.

The company declined to comment on the notice. Vodafone India said it had not received any notice. Idea Cellular already has a stay from the Delhi High Court against the stopping of 3G services through the intra-circle agreements.

The composite notice to Bharti has directed the telco to stop the provisioning and selling of 3G services to existing and new customers within these seven circles, and to provide confirmation of having stopped the service to DoT within three days.

The three telcos together have 12 million 3G subscribers. Of these, according to estimates, 30 per cent are in circles where the operator concerned does not have 3G spectrum.

Idea Cellular has 2.8 million 3G customers and Vodafone has 2.5 million.

Experts said as the 3G business was still small, the move might not impact the companies' overall businesses. "This issue of cancellation of 3G services in roaming areas has been factored in," said Sushil Sharma, senior research analyst, BRICS Securities. "The 3G business is very small and it will have no impact on the stocks."



But Bharti Airtel fell 1.2 per cent to close at Rs 311 a share in today's trade on the Bombay Stock Exchange. Idea Cellular's stock dropped 1.7 per cent to close at Rs 112 a share.

Bharti had won spectrum in 13 circles, spending as much Rs 12,295 crore, by aggressive bidding at the 3G spectrum auctions. As no operator could get a pan-India licence, the top three operators - Bharti Airtel, Vodafone India and Idea Cellular - had signed pacts sharing 3G spectrum and offering services across each others' circles. Vodafone India has 3G spectrum in nine circles and Idea has these in 11.

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