India - S Tel continues services despite stop order

[business standard] Calls on telecom minister A Raja to sort out ‘security’ issue.

Officials from S Tel met Union Communications Minister A Raja today to resolve Friday’s official directive to them to stop all mobile telephone operations, even as it continued these.

The directive from the Department of Telecommunications (DoT) to S Tel, a joint venture between the Chennai-based Siva Group and Bahrain Telecom (Batelco), was to stop its services in Himachal Pradesh, Bihar and Orissa. The reason given was ‘security concerns’ – a pending clearance from the Intelligence Bureau (IB), according to a ministry official.

“Our services and network are still running; we have a responsibility of our customers…we are discussing the matter with DoT and hope to resolve it at the earliest,” a company official said. S Tel has over 800,000 subscribers in these three telecom circles.

The official declined to talk about the security issues that led to DoT’s directive. The company also had a meeting with DoT officials today and told the latter that services could not be just stopped, as it would affect so many customers.

In a statement earlier, the company said it had followed the process and got all the necessary approvals and permissions for starting mobile services.

S Tel had challenged the government’s spectrum allocation policy in 2008, arguing it had unfairly denied S Tel licenses in various circles. S Tel won the case in the Delhi High Court and then again when the government challenged the decision before a larger bench. The case is now with the Supreme Court.

Batelco, which has 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 will acquire 11 per cent stake in S Tel for $50 million. GBC’s buying 11 per cent in S Tel will indirectly raise Batelco’s stake in S Tel by 6.3 per cent to 49 per cent.

S Tel continues services despite stop order