By Bloomberg

By Bloomberg

Telcos’ right to use 3G may get revoked

Telcos’ right to use 3G may get revoked

New Delhi: Bharti Airtel Ltd, Vodafone Essar Ltd and Idea Cellular Ltdmay see their right to use 3G spectrum revoked if the government decides that the so-called intra circle roaming arrangements between the operators to allow the firms to use each other’s airwaves to provide data rich services violate licence rules.

By Bloomberg

In July, the telcos announced they had signed bilateral roaming agreements in various circles in accordance with intra-circle roaming guidelines issued by the DoT in June 2008, albeit with the idea of allowing telcos that had a licence to operate in an area till the time they could set up their own network, the freedom to ride on the spectrum of another telco and start offering second generation mobile services. In October, the regulator recommended to DoT that the agreements be deemed illegal.

The subject of the adviser, finance’s note refers to the opinion of the wireless planning and finance wing (WPF) of the DoT that deals with spectrum usage charges among other issues.

WPF, in its reply to the issue, concurs with the three other divisions of DoT—wireless planning and coordination, access services and telecommunications enforcement and resource monitoring wing—that the type of roaming agreement signed by the telcos should be treated as spectrum sharing.

Currently, spectrum sharing is not allowed though the Telecom Regulatory Authority of India (Trai) has recommended that it be allowed for five years, extendable by another five, to ensure optimum use of the scarce resource. The recommendations were made last week as part of the regulator’s replies to a DoT letter seeking clarifications on Trai’s “spectrum management and licensing framework" recommendations of May 2010.

DoT has also formed a five-member committee to look at what actions should be initiated regarding the issue, a senior DoT official said. The official confirmed the WPF action.

The WPF wing has also said the roaming pacts will crimp future revenue from spectrum auctions and lead to cartelization among operators during auctions. The WPF also agreed with Trai’s opinion that treating intra-circle and inter-circle roaming in similar fashion would have serious financial implications on government finances.

Intra-circle roaming refers to one operator using another’s network till such time the first operator can set up its own network. DoT officials say the first operator should have the resource (spectrum) in hand (or expect it when available) to make use of the amendment. In the case of 3G roaming pacts, the telcos are offering 3G services in circles where they did not win 3G spectrum. This differs from inter-circle roaming where a subscriber can stay connected to their home operator even when going outside the home circle.

All three telcos maintain that they have followed all rules and regulations regarding the issue.

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