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3G roaming pacts: DoT looks at implications

Mansi Taneja  |  New Delhi 

The department of telecommunications (DoT) is examining whether the government would face any financial implications owing to the 3G roaming agreements between Bharti Airtel, Vodafone Essar and Idea Cellular.

The issue of 3G roaming agreements is still being examined, DoT secretary R Chandrasekhar said on Monday.

Basically, the government would look at three to four things. “One is NIA (notice inviting applications), and the subsequent clarifications. All of this has to be read as part of the contract,” he told Business Standard. The second is licence conditions; for, telecom is a regulated sector. “The third is the legal aspect of all these issues. Lastly, we have to take note of the financial implication for the government in terms of revenue.”

There is a certain percentage of average gross revenue that various operators pay to the government. Such roaming arrangements could lead to some financial implications, Chandasekhar noted.

Clarifying, he said if something was in accordance with licence conditions or in accordance with the agreement, then the revenue implication was immaterial — for, income is not the lone consideration here. “We have to look at all the dimensions.”

Since telecom is a regulated sector, the question was whether or not such agreements were allowed — rather than what was desirable and what was not, Chandrasekhar noted. “Our draft for the New Telecom Policy speaks for spectrum-sharing, but as of today it is not allowed,” Chandrasekhar added.

Further, much of the groundwork on this issue has been done, and a legal opinion is being awaited. Hopefully, a final decision would be taken by this month-end, the official said.

The 3G roaming agreements have been under the scrutiny of DoT and telecom regulator Trai. Through the roaming agreements, Airtel, Vodafone and Idea are offering services in circles where they don’t even hold 3G spectrum. Vodafone has spectrum in only nine circles, but it offers 3G services to its customers in 20 circles. Airtel has 3G in 13 circles, but offers services in 20 circles. As for Idea, the figures are 11 and 19. The country already has 10-15 million 3G customers.

Earlier, a DoT unit had said that a UASL (unified access service licence) licencee cannot offer 3G services and must declare a tariff plan or acquire customers in a circle where it has not been allocated the spectrum. It also said the 3G roaming agreements between these three companies tantamount to becoming mobile virtual network operators (MVNO), which is not allowed under the current policy. An MVNO firm offers mobile services on other the operator’s network and does not have its own licenced spectrum and infrastructure/network. DoT is currently considering the MVNO policy.

Even Trai has stated that its study on the issue (of 3G roaming between private operators) on legal, economic and technical grounds had led it to arrive at prima facie conclusion that such an arrangement is “violation of the terms and conditions of the licence”. The regulator also opined that the action of the operators could have serious financial implications for the government. That is because operators could provide 3G services in circles where they have not paid for spectrum which was auctioned by the government.

However, the operators claim that such a provision is allowed under the licence conditions and was written specifically in the NIA document for 3G auction.

BSNL had also taken strong objection to the 3G roaming agreement, saying that it would make the state-run company’s 3G business case “unviable” and add to its financial losses.

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First Published: Tue, November 15 2011. 00:12 IST