By Bloomberg

By Bloomberg

DoT may ask telcos to end 3G pacts

DoT may ask telcos to end 3G pacts

New Delhi: The department of telecommunications (DoT) is preparing to ask Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd to terminate the intra-circle third-generation (3G) roaming agreements they signed in July.

By Bloomberg

Over the past four-five weeks, various arms of DoT have submitted their opinions on the telcos’ agreements, which allow the operators to offer 3G services in areas where they do not own spectrum.

“We have to wait for the law ministry," said another official, who is part of a five-member committee formed within DoT to look into the matter.

In July, the telcos announced they had signed bilateral roaming agreements in various circles in accordance with intra-circle roaming guidelines issued by DoT in June 2008.

The three telcos maintain they have followed all rules and regulations in the matter.

In a letter dated 20 October, Trai asked DoT to deem the agreements illegal. After reviewing the agreements between the telcos and getting their justifications, the regulator decided that they were in violation of the licence agreements signed by the operators.

Trai also mentioned that the intra-circle roaming policy was implemented by DoT without recommendations from it.

The regulator said the agreements would result in a non-level playing field for telcos and throw up issues of security and quality of service.

DoT’s wireless planning and coordination, wireless planning and finance, and access services wings have all independently agreed that the agreements are illegal as they are similar to spectrum sharing, currently barred in India. Trai has said the agreements are akin to mobile virtual network operations, which too are not allowed.

DoT’s adviser (finance) has said in a note that the 3G spectrum assigned to the telecom operators may be revoked if the licensor determines that they breached terms of the allotted spectrum, including adherence of auction rules, and roll-out obligations, as Mint reported on 10 November.

In case of serious breaches, the licensor may impose penalties as well, the adviser says in the note.

Spectrum sharing is not allowed in India, though Trai has recommended that it be allowed for five years, extendable by another five, to ensure optimum use of the scarce resource.

DoT’s wireless planning and finance wing, which looks into spectrum-related revenue issues, has said in its submission that the roaming pacts will limit future revenue from spectrum auctions and lead to cartelization among operators during auctions.

It agreed with Trai’s opinion that treating intra-circle and inter-circle roaming in a similar fashion will have serious implications for government finances.