Roaming losses pinned on DoT

The Department of Telecommunications (DoT) alone is responsible for allowing intra-service area roaming, according to a recent audit report.

Intra-service area roaming caused huge loss to the exchequer, as it was done without analysing the need for the service, its financial implications, and impact on the roll out obligation of new operators, the report pointed out.

In June 2008, DoT inserted a clause amending the Cellular Mobile Telephone Service Licence to enable operators to enter into mutual commercial agreements among themselves for intra-service area roaming facilities. With this, a service provider could offer service in a specific circle without having spectrum or licence in that particular circle.

The report said this caused loss to the tune of thousands of crores of rupees to the government exchequer. This is also one reason why the government received muted response in the 2G spectrum auctions in November 2012 and March 2013, it added.

According to the report, DoT’s decision was taken in “undue hurry”. Further, the audit report pointed out the insertion of the clause in the licence conditions was to help some of the new Unified Access Service licencees launch services with the help of established operators, without the need to set up their own network.

Prior to that, there were provisions in the licence agreements for inter-circle roaming. Since there were several pan-India operators, there was no need for an intra-service area roaming, the audit report noted.

According to the report, the proposal was neither recommended by Trai as required under the Trai Act 1997, nor approved by the Telecom Commission. Even the member (finance) of the Telecom Commission, who is the representative of the finance ministry, wasn’t consulted at the time of modification of the terms and conditions of the licence agreement. This has significant financial implications for future auctions of the spectrum, the report noted.