3G roaming pacts under scrutiny

In a development that could make it difficult for third generation (3G) telecom operators to provide pan-India services, a Department of Telecommunications (DoT) division has asked them to refrain from offering services in circles where they do not have 3G spectrum by getting into roaming agreements with competing players which have.

The companies will be liable for action if they do not comply.
The move could have an adverse impact on companies like Vodafone, Airtel and Idea Cellular, who have been able to offer 3G services across the country without having spectrum in many circles.

This became possible after the three companies recently signed an inter-circle roaming agreement to use each other's networks.

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While Vodafone has spectrum in only nine circles, it offers 3G services to its customers in 20 circles. Airtel has 3G spectrum in 13 circles but offers 3G services in 20 circles. Idea Cellular has 3G spectrum in 11 circles but offers 3G services in 19 circles.

The number of circles where 3G spectrum was auctioned is 22.

With the operators challenging the Telecom Enforcement, Resource and Monitoring (TERM) division's stance and saying the practice is allowed under the UASL (Unified Access Service License) rules, a regulatory battle is expected.

According to DoT sources, the department may refer the matter to the Telecom Regulatory Authority of India (Trai). Trai has started scrutiny on its own and asked telecom operators to give details of their 3G roaming agreements.

A Trai source said there was a case for questioning such services.

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Telecom operators that have refrained from providing 3G services where they do not have spectrum say their competitors' action means an operator can pay Rs 1,750 crore (Rs 17.5 billion) for a pan-India licence and offer 2G, 3G and 4G services without bidding or having any spectrum.

So, many of the new operators who had not bid for 3G spectrum could give 3G services across the county or even 4G, by having a UASL licence, though neither trading of spectrum or allowing MVNO (Mobile Virtual Network Operator) operations is permitted, says a senior executive of a telecom company.

This, the companies say, could lead to a major loss in revenue for the government in the coming auctions for 3G and 4G, as operators would prefer to get into roaming arrangements rather than pay for expensive spectrum.

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An Airtel spokesperson, confirming the communication, said: "All the desired information required by the TERM cell has been provided to them. Bharti Airtel is in complete compliance of the license conditions and all our agreements are as per the stated government policy." Idea Cellular also confirmed the communication and said it had responded. Its action was "as per policy guidelines", the company said.

According to the communication from the TERM cell, set up to ensure adherence to the licence conditions, it had come to their notice that telecom operators without spectrum and licence amended for the provision of 3G services had entered into inter-circle and intra-circle roaming arrangements (with other operators who have 3G spectrum in the circle), not permitted in the licence.

It says the 2G operator cannot enter into a roaming agreement with a 3G operator for giving 3G services.

The cell has directed operators to refrain from giving the service, pending a clarification on this issue from the DoT and that anyone offering 3G services in this manner would be liable for action.

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The operators giving the service would be considered as unlicensed service providers, against whom action can be taken under the law, while action could be taken against the roaming partner, too, for breaching licence conditions.

The affected operators, such as Vodafone, have said in their reply their UASL allows them to offer "all types of access services", including services like voice, data and triple play.

They say under the terms, no additional licence is required for offering something like high-speed services. And, that under the UASL licence, companies can enter into agreements with others to offer national and international roaming services to customers.

The Vodafone response also says that in response to an earlier query sent by the industry to DoT, on whether customers of UASL would be allowed to roam on 3G networks of other UASL networks in the same licence area, the reply was affirmative.

A senior executive of one of the operators said it was only after the issue was so clarified that operators were willing to pay such a high price at the auction of 3G spectrum, knowing no one could win pan-India spectrum for the services.