New entrant, S Tel said on Tuesday that it may not pursue more licences in the remaining 16 circles of India. The move coincides with the DoT asking the company to stop offering mobile services last week.

In a letter to DoT, S Tel says that it is reviewing its strategy for licences in the remaining 16 circles due to a combination of factors such as the emergence of several new players, hyper competition, the fact that several existing players have not been allotted airwaves and evolution of new technologies such as 3G and 4G.

S Tel executives had met Communications Minister A Raja on Monday to resolve the stand-off.

S Tel has licences to offer mobile services in 6 circles. It had applied for these 6 circles before September 25, 2007. The DoT had issued a press release notifying that September 25, 2007 will be considered as last day for applying for new 2G licence instead of earlier announced date of October 01, 2007. This decision was challenged by S Tel in Delhi HC.

The Delhi HC too had ruled in favour of S Tel. The case was then  taken up to the Supreme Court by DoT and is scheduled for hearing this month.

The Delhi HC’s order had already caused a huge embarrassment to DoT as it actually questioned the Ministry’s decision to act arbitrarily. The issue is again related to DoT’s controversial decision of granting new 2G licences by resorting to favouritism.