India Court Says Bharti Can Provide 3G for Now

NEW DELHI--India's top court Thursday allowed Bharti Airtel Ltd. 532454.BY -2.31%to continue providing third-generation telecom services until further orders in some regions where it doesn't have permits, but prevented it from signing up new customers in those places.

The ruling will give at least a temporary relief to Bharti as well as the subscribers to its 3G services in seven regions who would have otherwise faced service disruptions until they switched to other operators, because the government had ordered the company to stop providing 3G services in those places.

The Supreme Court also put on hold a penalty of 3.5 billion rupees ($64.4 million) that the government imposed on the company, and asked the telecom department not to take any actions against Bharti until it gives its order. The court will hear the case again after four weeks.

Bharti executives and government officials weren't available for comments.

The court's ruling came on a plea filed by the company after the government in March ordered it to stop 3G services in Haryana, Maharashtra, Madhya Pradesh, Uttar Pradesh (East), Kolkata, Gujarat and Kerala service areas. The company is providing such services in these regions under network-sharing contracts with Idea Cellular Ltd.532822.BY +2.16% and the local unit of U.K.-based Vodafone Group PLC.VOD.LN +0.62%

The contracts allow these companies to offer 3G services in any region where at least one has the permit and bandwidth. The government said this violated the country's telecom rules and asked the three companies to stop providing 3G services in places where they don't have permits.

Bharti had about 184.20 million of the country's 862.62 million wireless users at end of January. The company, which has permits to provide 3G services in 13 of the country's 22 telecom-service areas, doesn't give its 3G user base.

Bharti was the first to be ordered to stop the services given under the network-sharing contracts. A judge of Delhi's high court stopped the execution of the order in March, but a two-member bench of the same court lifted that stay last week. The company approached the Supreme Court following the high court's order last week.

Idea Cellular and Vodafone India Ltd. were asked to stop the services last week. They have challenged the order in the Delhi High Court, which has yet to consider their applications.

Executives at Idea Cellular and Vodafone India declined comment.




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