The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had on April 29 overturned a DoT ban on offering 3G mobile services beyond their licensed zones through roaming pacts, saying it was in national interest to allow better utilisation of scarce radio frequency. In a hard-hitting, 88-page judgment, TDSAT had called DoTs stand misleading, its basic premise seriously flawed and its extension to spectrums even more fallacious and said its stopping of intra-circle 3G roaming violated the telcos fundamental right to do business guaranteed under Article 19(1)(g) of the Constitution.
Challenging the TDSAT's judgment that ruled in favour of intra circle 3G roaming, DoT in its appeal said the
tribunal erred by distinguishing between the delivery
of services permissible under the licence and the allocation of spectrum for rendering those services and also
arriving at an erroneous conclusion that use of 3G technology and the delivery of services through 3G technology is not excluded from the scope of the licence.
Stating that 3G service is a separate and valuable service and not an extension or continuation of the 2G spectrum, the department said the holders of 2G licences cannot provide 3G services by entering into intra-circle 3G roaming arrangement.
The tribunal has failed to appreciate that the licences for providing 2G and 3G services are different and that the parties who fail to get 3G licences cannot circumvent the provisions of the licences and enter into arrangements to provide 3G services, which are contrary to the terms of licences, DoT sated.
While DoT held these pacts between service providers as illegal and said it was equivalent to subletting ones spectrum, the TDSAT had stated that such arrangements did not violate the Unified Access Service Licence, and had also quashed R1,200 crore of penalties levied by the department.
The DoT had levied penalties of R550 crore on Vodafone, R350 crore on Bharti Airtel and R300 crore on Idea Cellular. 3G contributes about 4-4.5% of revenues for the telcos, so revenues from intra circle roaming agreements are likely to be even lower.
The government further told the apex court that intra-circle 3G arrangements would result in loss of revenue to it as the radio spectrum charges were payable as a percentage of annual gross revenue of a licensee.
Airtel had won 3G spectrum in 13 out of 22 telecom service areas for R12,295.46; Vodafone in 9 for R11,617.86 and Idea Cellular in 11 circles for R5,768.59 crore.