TDSAT divided on telcos' 3G roaming agreements

Department of telecom asked to issue fresh notices to operators

The two-member bench of the Telecom Disputes Settlement Appellate Tribunal (TDSAT) has given a spilt verdict on the legality of telecom operators getting into roaming pacts to offer 3G services in circles where they do not have spectrum. Member P K Rastogi said the operators (Airtel, Vodafone and Idea Cellular) could not provide roaming services as they were not allowed to provide 3G services with 2G licences.

However, the chairman, Justice S B Sinha, ordered the DoT (department of telecommunications) to start the procedure afresh, as the department had not followed proper procedure and the operators were not given enough time to present their views, which was violative of natural justice.

Telecom majors Bharti Airtel, Vodafone and Idea Cellular had entered into mutual agreements to offer 3G services in circles where they could not bag 3G spectrum in an auction held in 2010.

The DoT had ruled such pacts illegal in December 2011 and asked the operators to stop offering 3G services beyond their licensed circles through roaming agreements. The operators had filed a petition challenging the DoT’s verdict.

Lawyers say as a result of the split verdict, the “status quo” would be maintained. The tribunal had ruled in December the DoT could not take coercive steps against the operators until the case was decided. Lawyers point out the split order means the operators can continue to offer 3G services but cannot enter any new circle. They say the next course of action for the operators is to go to the Supreme Court against Rastogi’s order, while the government has the option of sending a fresh showcause notice to the operators or challenging the order of Justice Sinha.

When contacted, Bharti Airtel and Idea Cellular declined to comment on the issue, as the matter was sub-judice.

While the operators were yet to decide on the future course of action, Rajan Mathews of COAI (Cellular Operators Association of India), the industry body representing GSM players, said, “Though it is a spilt verdict, we are disappointed. We are looking forward to the final ruling. The DoT now has 90 days to file a rejoinder to the earlier notice. We’ll wait for the 90-day window and then approach the Supreme Court.”

The market responded favourably, with the stocks of Bharti Airtel and Idea Cellular gaining more than three per cent each after the verdict. Bharti Airtel closed 3.1 per cent higher at Rs 319.5 a share, while Idea Cellular closed 5.41 per cent higher at Rs 81.90 a share on the Bombay Stock Exchange.