3G agreements between Airtel, Vodafone and Idea are tantamount to their becoming MVNOs: DoT

The Department of Telecommunications (DoT) has clarified that an operator holding a unified access service licence cannot offer 3G services or attempt to acquire customers in a circle where it does not have 3G spectrum.

In an internal note, DoT has reportedly stated that the 3G roaming agreements between Bharti Airtel, Vodafone Essar and Idea Cellular are tantamount to their becoming mobile virtual network operators, which is not permitted under the current policy.

A mobile virtual network operator offers mobile services on other operators’ network and does not have its own licensed spectrum and infrastructure. DoT is currently considering framing a policy for MVNOs.

Prior to this, the Telecom Regulatory Authority of India (TRAI) had said that the 3G roaming agreements between operators violated licence conditions, but had decided to ask the Department of Telecommunications (DoT) to take a final decision on this issue.

Also, the operators had informed TRAI that before the 3G spectrum auction, DoT had stated that the roaming policy was applicable to licences and was not specific to spectrum bands.

The operators had provided copies of the clarifications given by DoT on this issue before the 3G auctions. The clarifications quote the DoT’s response to operators’ queries on this issue as stating that roaming will be permitted.

In September 2011, DoT had asked TRAI to examine the 3G roaming agreements inked between various operators. With no operator managing to pan-India 3G spectrum in last year’s auctions, Bharti Airtel, Vodafone Essar and Idea Cellular had entered into an alliance that enabled them to offer high-end data services on a pan-India basis (except Orissa).

Bharti Airtel, Vodafone Essar and Idea Cellular had won 3G spectrum in 13, 9 and 11 circles, respectively and their roaming pacts ensured that their customers could access high-speed data services even in the regions where they do not hold 3G spectrum.

Similarly, Aircel has inked a similar deal with Tata Teleservices Limited (TTSL) to offer 3G services in six circles using the latter’s airwaves.

Prior to this, DoT?s Telecom Enforcement, Resource and Monitoring (TERM) Cell had said that the 3G roaming agreements between Bharti Airtel, Vodafone Essar and Idea Cellular were illegal and had asked DoT to initiate action against the three operators. This is expected to include issuing show cause notices and imposing financial penalties.

If carried out, the three operators may have to pay Rs 500 million as penalty for every circle in which they have entered into 3G roaming agreements.