Telecom Lead India: The government has ordered Airtel to stop its 3G services in Kolkata, Maharashtra, Gujarat, Haryana, Uttar Pradesh, Kerala and Madhya Pradesh — where it does not have permits — by Monday. Reliance Jio Infocomm will benefit from this move.
Bharti Airtel, India’s #1 telecom player, moved the Delhi High Court on Friday against the telecom department (DoT) directive, and the court will hear the case on Monday.
DoT has also slapped a Rs 350 crore penalty on Airtel for offering 3G data services in 7 circles — where it does not have 3G frequencies — as it violated government guidelines. The penalty will be a big blow for the operator which is struggling to increase profitability from India and African operations.
The main beneficiary — of the DoT directive — will be Reliance Jio Infocomm that is gearing up to launch 4G services on TD-LTE technologies. Reliance Jio Infocomm can offer high speed mobile broadband across the country — without a roaming pact — as it has nationwide license.
Since Reliance Jio Infocomm will be in a position to offer voice services using the BWA spectrum it bought in 2010, it will be another big hit on the revenue streams of existing telecom service providers including Airtel.
But Reliance Jio Infocomm will face tough tasks for offering seamless data and voice connectivity across the country without the support of 2G or 3G spectrum license.
For example, Airtel is looking at offering voice service to its 4G users in Pune, leveraging its existing 2G network.
If Bharti Airtel is not able to secure relief from the Delhi High Court on Monday, it will have to shut 3G services in seven circles and its customers will have to migrate to other operators if they need seamless 3G. However, its 3G services in 13 circles will not be affected.
As per its annual report, Airtel had about 7 million 3G customers across the nation till December 2012. Airtel does not share circle specific subscriber statistics on 3G users.
Though analysts say 3G revenues account for less than 2 percent of Airtel’s total sales currently, it will affect business plans of Airtel in the long run.
Other operators that will be affected will be Vodafone India and Idea Cellular, partners of Airtel in the controversial 3G agreement.
Airtel, Vodafone and Idea Cellular won 3G airwaves in 13, 9 and 11 circles, respectively, in the 2010 auctions, and between them have a national footprint. Their intra-circle roaming pacts enabled them to offer 3G data services on a pan-India basis.
Arvind Krishna
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