DoT may invoke Airtel's bank guarantees

Has written to banks in this regard as the company has not paid Rs 350 cr penalty for providing 3G services outside permitted areas

The Department of Telecommunications (DoT) intends to invoke bank guarantees given by service provider Bharti Airtel, and has written to banks in this regard as the company has not paid the Rs 350-crore penalty imposed on it for providing 3G services outside permitted areas.

"The communication was made by the finance wing of DoT to various banks where they (Bharti Airtel) have provided bank guarantees," a DoT official said. The official said the letter was sent to banks on Friday, but he did not share bank names.

Bharti Airtel in a statement said it had always maintained the highest standards of compliance. "We believe the 3G intra-circle roaming arrangements are in compliance with all applicable laws and licensing conditions. These arrangements are also hugely beneficial to customers and discontinuing these will cause grave inconvenience to them," the statement added.

The fine was imposed on March 15 for providing 3G services in areas where Airtel did not have 3G spectrum by entering into a pacts with other service providers. Airtel was directed to deposit the penalty amount within 15 days.

The DoT had slapped the penalty for violation of UAS liecnce conditions in Haryana, Maharashtra, UP (East), Kolkata, Gujarat, Kerala and Madhya Pradesh service areas where the company was providing 3G services to customers without having 3G spectrum and licence amendment for right to use 3G spectrum for provisioning of 3G services .

The Delhi High Court on last Thursday set aside a single judge order which allowed Airtel to continue providing 3G intra-circle roaming facilities with other service providers. An Airtel statement said the company had filed a special leave petition against the order of the division bench of the Delhi High Court. "Our special leave petition is listed before the Supreme Court on Monday," it added.

DoT had last Friday asked Airtel to end its 3G roaming pact with Idea Cellular and Vodafone under which the three firms on quid pro quo basis have been selling 3G services in telecom circles where they hold spectrum for the same.

The Department had also slapped a Rs 550-crore penalty on Vodafone and Rs 300 crore on Idea Cellular for violating 3G service roaming norms and had asked them to end the pact by April 8. Airtel, it is learnt, has been asked to stop providing 3G services by Saturday. This, however, could not be independently verified. In 2010, of the 22 service areas, Airtel acquired 3G spectrum in 13, Vodafone in 9 and Idea Cellular in 11 circles.