In a joint letter to Kapil Sibal, Minister of Telecommunications and IT, top-ranking officers from Bharti Airtel, Vodafone Essar, Tata Teleservices Limited (TTSL) and Idea Cellular have said that the agreements to use each other’s 3G airwaves were legal and permissible.
In the letter, Sanjay Kapoor, CEO, India and South Asia, Bharti Airtel; Himanshu Kapania, managing director, Idea Cellular; Marten Pieters, CEO and managing director, India, Vodafone Essar and N. Srinath, managing director, TTSL said that prior to the 2010 3G auctions, the industry had clarified with the government that such deals would be permitted.
The letter stated, “Any determination now that this might not be the case would fundamentally alter the legal and economic basis on which the business case of 3G bids was evaluated, inevitably leading to a requirement to either refund the bidders or rerun the auction.? They also said that assertions that these arrangements have led to revenue loss for the exchequer were baseless.
While seeking an urgent and personal intervention from Sibal on this issue, the companies further said that any move to disallow 3G roaming deals would negatively impact investor sentiment and do irreparable damage to India’s long standing as an investment destination with serious consequences on the future growth and development of the sector. “We are now dismayed and astonished by the disingenuous and protracted disinformation campaign against the intra-circle roaming arrangements being followed by number of industry entities,” their communication added.
Prior to this, the Department of Telecommunications (DoT) had 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 reportedly stated that the 3G roaming agreements between Bharti Airtel, Vodafone Essar and Idea Cellular was 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.
Moreover, 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.
