A telecoms tribunal on Tuesday gave a split verdict on a challenge by mobile phone operators seeking to overturn a government order requiring them to stop offering 3G services beyond their licensed zones through mutual roaming pacts, lawyers said.
The tribunal said both sides can appeal at a higher court, according to one lawyer on the case, after one judge voted in favour of the government and the other in favour of the mobile phone operators.
The tribunal's decision was keenly watched by investors in Bharti Airtel
, Vodafone's Indian unit and Idea Cellular - the country's top three carriers by revenue - which have managed to offer 3G services in most parts of the country because of the pacts.
A lawyer on the case said the companies were allowed to continue services until a further order.
Shares in Bharti rose more than 3 percent while Idea gained over 4 percent.
Officials from the telecoms ministry were not immediately available for comment.
In a 2010 government auction, Bharti won 3G bandwidth in 13 of the country's 22 service areas, while Idea gained access to 11 and the Vodafone unit nine.
The telecoms ministry told carriers last December that it was illegal to offer 3G services beyond their allotted zones by mutually agreeing to share their airwaves.
In the same month, the three operators and smaller rivals Tata Teleservices and Aircel challenged the government order before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
Bharti, Vodafone and Idea previously said their roaming pacts complied with telecoms licensing rules.
India raised more than $12 billion from the 3G airwaves auction, but no single company managed to win airwaves in all of the country's service zones as bid prices were much higher than expected.
Bharti, controlled by billionaire Sunil Mittal, spent $2.2 billion to acquire its 3G permits, while Vodafone paid $2.1 billion and Idea about $1 billion.
Operators launched 3G services last year and are still expanding their networks.
Uptake of the premium data services, which facilitate faster Internet browsing on mobile phones and services such as video calls, have been slower than expected.
The fledgling 3G services do not contribute much to operators' revenue, the bulk of which comes from traditional voice services.
The government ban on roaming pacts has added to the negative sentiment surrounding a sector that is now struggling because of fierce competition and regulatory uncertainties.