3G roaming pacts: DoT turns heat on telcos

Slaps Rs 550 cr penalty on Vodafone, Rs 300 crore on Idea. Airtel approaches SC for relief

The Department of Telecommunications (DoT) today issued notices to Vodafone India and Idea Cellular canceling the intra-circle roaming (ICR) agreements that enables these companies to offer 3G services in the circles where they do not have spectrum.

DoT has also slapped penalty of Rs 550 crore on Vodafone India and Rs 300 crore on Idea Cellular for alleged violation of licence norms.

The move comes just after a day of the order by a Division bench of the Delhi High Court that cancelled the court’s earlier stay order on the execution of the notice of DoT asking Bharti Airtel to stop offering 3G services under ICR pacts.

The top three operators—Bharti Airtel, Vodafone India and Idea Cellular—had signed pacts for sharing 3G spectrum and offering services across each others’ circles, as no operators had bought pan-India 3G spectrum through auctions in 2010. While Bharti Airtel has 3G spectrum in 13 circles, Vodafone India has in nine circles and Idea has in 11 service areas.

Idea Cellular has obtained a stay from the Delhi High Court against the stopping of 3G services some time back.

Both Vodafone India and Idea Cellular declined comments on the issue.

Meanwhile, Bharti Airtel today filed a Special Leave Petition before the Supreme Court (SC) against Thursday’s order of the division bench of the Delhi High Court that cancelled the court’s earlier stay order on the execution of the notice of the Department of Telecommunications (DoT) asking it to stop offering 3G services where it does not have spectrum. The matter will be heard at the SC on April 8.

Bharti Airtel has reportedly said in its petition that the order of the division bench of the Delhi High Court would impact about 20 million subscribers, and the case needs to be heard at the earliest.

However, Bharti Airtel has not stopped services in the seven circles where it does not have spectrum. As Bharti Airtel was supposed to immediately stop services after Delhi High Court’s order on Thursady, the Government may impose additional penalty because of the delay and for violation of licence conditions.

Bharti Airtel, Vodafone India and Idea Cellular together have about 12 million 3G subscribers in India. Of these, Bharti Airtel has 6.8 million 3G subscribers (5.2 million active), Idea Cellular has 2.8 million and Vodafone India has 2.5 million 3G customers.

According to industry experts, abolition of ICR pacts for 3G services could impact about 30% of its total 3G subscribers.