Leading telecom operators Bharti Airtel, Vodafone Essar, Idea Cellular and Tata Teleservices have jointly said the government may have to refund money to operators or re-run the third-generation (3G) spectrum auction, if their roaming agreements are not considered permissible as in the licence conditions.
In a joint letter to communications minister Kapil Sibal, they’ve said it was only after being assured by the licence conditions and an explicit prior written clarification before the 3G auction from the department of telecommunications (DoT) that bidding in the auction took place, on the clear understanding that such arrangements (3G roaming deals) were legal.
“Any determination now that this might not be the case would fundamentally alter the legal and economic basis on which the business case for 3G bids was evaluated, inevitably leading to a requirement to either refund the bidders or re-run the auctions,” the letter said.
Saying their licences permitted the operators to provide all types of access services, the companies said a separate licence was not required for offering 3G services. And, that the 3G auctions held last year auctioned 2.1GHz spectrum and not 3G licences.
The letter also said any adverse move could negatively impact investor sentiment and do irreparable damage to India's standing as an investment destination, with serious consequences on the future growth and development of the sector. The companies have sought Sibal’s intervention to resolve the situation.
The development came after a DoT internal note said a UASL (unified access service licence) licensee cannot offer 3G services and declare a rate plan or acquire customers in a circle where it had not been allocated 3G spectrum.
DoT said the 3G roaming agreements entered between these private companies were tantamount to their becoming mobile virtual network operators (MVNO), which is not allowed under the policy.
An MVNO company offers mobile services on other operators’ network and does not have its own licensed spectrum and infrastructure/network. The MVNO policy is currently under consideration by the DoT.
The Telecom Regulatory Authority of India (Trai) had also clearly stated that after studying the issue (3G roaming between private operators) on legal, economic and technical grounds, it had decided such as arrangement was a "violation of the terms and conditions of the licence”.
The country already has 10-15 million 3G customers. Private companies had launched 3G services late last year. Through the roaming agreements, Bharti Airtel, Vodafone Essar and Idea Cellular are also offering services in circles where they don’t hold 3G spectrum.
While Vodafone has spectrum in only nine circles, it offers 3G services to its customers in 20. Bharti Airtel has 3G spectrum in 13 circles but offers 3G services in 20. Idea has 3G spectrum in 11 circles but offers these services in 19. The number of circles where 3G spectrum was auctioned last year is 22.