Reliance Comm cuts off Etisalat over payments

NEW DELHI (Reuters) - Reliance Communications said it had disconnected from its network a mobile phone joint venture between Abu Dhabi-based Etisalat and India's DB Group over non-payment of fees for using its towers.

The joint venture, Etisalat DB, said separately it had been facing network disruption across India since last Friday due to a technical issue beyond its control.

It did not mention any dispute with Reliance Communications, but in a separate statement Etisalat urged the two parties to reach a resolution. The United Arab Emirates operator owns a 45 percent stake in Etisalat DB.

Under a 10-year deal signed in 2009, which the companies had said was worth about $2 billion, Etisalat DB uses Reliance's base stations to provide services in 15 zones in India.

"Despite repeated reminders, payments have been inordinately delayed by EDB (Etisalat DB) without any reasonable cause, leading to the disconnection of services," a Reliance Communications spokesman said in a statement.

Etisalat DB issued a statement apologising to its customers for "a temporary mobile service disruption", adding it was working around-the-clock to resolve the issue.

"This is a local matter between EDB (Etisalat DB) and its vendor, therefore it is not appropriate for us to comment," Etisalat said in a statement emailed to Reuters.

"We are being advised regularly by EDB's management team and we encourage both parties to reach a resolution quickly."

Etisalat DB, which had 1.67 million subscribers as of December, is ranked 14th among India's 15 mobile operators.

Etisalat DB and top executives of the DB Group are among several companies and more than dozen people charged by police in a massive telecoms licensing scandal over the alleged below-market-price sale of telecom permits in 2008.

All the accused have denied any wrongdoing. Etisalat has said the events described in the charges pre-date its entry into India.

(Reporting by Devidutta Tripathy; Additional reporting by Matt Smith in Dubai; Editing by Ted Kerr and David Holmes)