DoT orders S Tel to stop ops for 'security' reasons

With user base of 80,000, the company is operating in Himachal Pradesh, Orissa, Bihar.

S Tel, a joint venture between the Chennai-based Siva Group and Bahrain Telecom (Batelco), has been asked by the Dpartment of Telecommunications (DoT) to immediately stop its mobile services in Himachal Pradesh, Bihar and Orissa, owing to security concerns. The company has mobile licences for Himachal Pradesh, Orissa, Bihar, Jharkhand, Jammu and Kashmir and Assam circles, but is operational only in the first three, with a subscriber base of over 800,000.

When asked, a company spokesperson confirmed receiving a letter to stop voice and SMS services. “Yes, we received the letter a few hours ago. We are surprised that after giving us the permission through letters dated December 11, 2009, and December 21, 2009, we should receive this letter today. The letter mentions national security concerns, without any details or specifics, and we are trying to ascertain the same for any supportive action from our side. As far as we know, we have followed the process and have obtained all necessary approvals and permissions,” the statement for the company said.

Batelco, which has a 42.7 per cent stake in S Tel, entered into a partnership with the Bahrain-based Islamic investment bank, Global Banking Corporation (GBC), which in turn would acquire 11 per cent stake in S Tel for $50 million. GBC’s buying 11 per cent in S Tel would indirectly raise Batelco’s stake in S Tel by 6.3 per cent to 49 per cent.

S Tel had challenged the government’s spectrum allocation policy in 2008, arguing it had been unfairly denied licences in various circles. It won this case in the High Court of Delhi, and then again when the government appealed to a bigger bench. The case is now pending at the Supreme Court.