In a huge setback for the country?s top three mobile operators ? Bharti Airtel, Vodafone and Idea Cellular ? the department of telecommunications (DoT) has finally termed the intra-circle roaming pacts among them as illegal. The department may now levy a penalty on them for violating licence conditions.
Through such roaming pacts these companies were able to offer services to subscribers even in those areas where they did not have 3G spectrum.
?The decision has been taken that 3G intra-circle roaming pacts are in violation of the terms and conditions of the licence. We will be issuing notices asking the operators to stop their service with immediate effect. But on penalty, no decision has been taken yet,? DoT secretary R Chandrasekhar told FE.
The DoT arrived at the decision after the Telecom Regulatory Authority of India (Trai) and the law ministry gave their opinion that such pacts were not legal.
The development is sure to sour the industry-government relations as the operators had gone to the Prime Minister stating that the roaming agreements were fully legal and that if the government termed it illegal, they were willing to surrender the spectrum and their money should be refunded. The PM had assured them that he would look into their concerns.
The decision to scrap such pacts among operators also comes at a time when the telecom sector is facing a lot of controversies and the government-industry relationship is at its weakest. In fact, the Telecom Commission is expected to take crucial decisions on a host of other related issues on December 26.
The operators’ bids were astronomically high when auctions for 3G spectrum were held in mid-2010, which led to the government earning a massive Rs 68,000 crore.
The operators have further invested another Rs 15,000-18,000 crore to roll out the networks and are slowly in the process of starting the services. None of them are yet making money on 3G operations, and with a weakening rupee would take a further hit on repaying their foreign loans.
There can be no relief for the operators in the new telecom policy expected to be announced next month, which has promised to allow sharing of spectrum. ?Sharing of spectrum will be allowed only among operators who have circle-specific licences, so it is different from allowing intra-circle roaming,? a DoT official said.
Though none of the three operators officially commented on the development stating that they are yet to receive any notices from the government, privately they said they would challenge the decision in court. The operators maintain that there are documented clarifications sought by them and responses provided by DoT that states that intra-circle the same is allowed.
Intra-circle roaming is not a new concept, having been around since 3G services began.
It basically means that an operator not having 3G spectrum in a circle can enter into a roaming pact with another operator in the same circle having spectrum in this band and offer services to its customers. Bharti, Vodafone and Idea had entered into such agreements with one another to offer 3G services in circles in which they could not succeed in getting spectrum in the auctions. Tata Teleservices and Aircel had also entered into similar agreements but scrapped it once the controversy arose.
These pacts are different from inter-circle roaming, which is valid and applies only for those subscribers who roam from their home circle to other circles.
Intra-circle roaming was allowed by the telecom ministry in 2008 by amending the unified access service licence. In fact, the charge-sheeted firm Swan Telecom was the first to enter into such a pact the same year with state-owned BSNL to roll out 2G services.
