New Delhi: To increase pressure on the government regarding 3G intra-circle roaming (3G ICR) agreements, the promoters of Bharti Airtel Ltd and Idea Cellular Ltd, Sunil Mittal and Kumar Mangalam Birla, as well as the global chief executive officer of Vodafone Group Plc, Vittorio Colao, have jointly written to Prime Minister Manmohan Singh, seeking his urgent intervention in the matter.
They have also said that if the roaming agreements are declared illegal, the government would have to return the money paid by the telcos for the spectrum as well as the money invested in building 3G networks.
“In the event 3G ICR is now deemed impermissible, then, it would be a clear breach of our contract and the pre-auction confirmation given by the government,” said the letter, a copy of which has been reviewed by Mint. “In that eventuality, we request that our spectrum payments be refunded to us with interest along with compensation for all capital investments made by us.”
This follows a similar letter written by the CEOs of the three firms and Tata Teleservices Ltd to the department of telecommunications (DoT) earlier this month.
In July, the three telecom operators announced they had signed bilateral roaming pacts with each other that would enable “seamless connectivity” for their mobile users. These were signed on the basis of a June 2008 amendment to the telecom licence agreement that enables an operator to share its network with another licensed telecom service provider in a certain operating area or circle, till such time the operator can set up its own network. “Our licences were specifically amended in 2008 to incorporate the right to do ICR without any caveat or restriction of technology and/or spectrum,” the letter said.
As reported by Mint, thus far, three different divisions have said the agreements are illegal. These include the access services division that looks into telecom services operational issues, the wireless planning and coordination wing that oversees spectrum and the wireless planning and finance division that looks into spectrum finance-related issues.
The Telecom Regulatory Authority of India (Trai) submitted its recommendation that the agreements be declared illegal to DoT in October. The various divisions have found that either the agreements were akin to spectrum sharing or those related to MVNO (mobile virtual network operator). The legal adviser in DoT has since collated these opinions and forwarded them to the ministry of law and justice.
“If we didnt have a telecom licence then we can be called a MVNO,” T.V. Ramachandran, resident director, regulatory affairs and government relations, Vodafone Essar, said on Monday. “Roaming agreements pertain to a licence and not to the spectrum used. That is why the licence is a universal one allowing us to operate almost all communication services.”
“This is tantamount to reneging on the government’s promises made through the technology neutral licence and the 2008 amendment and the Q&A confirmations provided before the 3G auctions,” the letter said, referring to the pre-bid conference held in January 2009. At this conference, DoT representatives were specifically asked whether roaming of this kind (ICR) would be allowed, to which the government replied in the affirmative.
“Even DoT in its recent communication to Trai has clearly stated that ‘intra service area roaming in 3G network, where one of the operators does not have 3G spectrum, shall not be treated as spectrum sharing,’” the letter said. “Indisputably, 2G, 3G and 4G are merely different technologies for all access services—all permissible in our technology neutral UASL (unified access service license) environment,” it added.
The issue started when BSNL and some individuals complained to DoT that operators such as Idea were selling 3G connections in Delhi where they did not get spectrum in last year’s auction. Idea was able to offer services through a bilateral ICR agreement with Vodafone.
A Mumbai-based analyst said operators stand to lose as much as 6% of revenue if the pacts are deemed illegal. This is because many of their high-end subscribers in circles where they do not have spectrum will port to operators that have 3G spectrum.