Free Press Journal

3G roaming pacts upheld; Rs 1,200 cr fine on 3 telcos quashed


New Delhi: In a relief to Airtel, Vodafone and Idea, telecom tribunal TDSAT today overturned a government ban on offering 3G mobile services beyond their licensed zones through roaming pacts saying it was in national interest to allow better utilisation of scarce radio frequency.

The judgement brought relief to the three operators, who faced a penalty of Rs 1,200 crore for entering into pacts with each other to offer 3G services in regions where they did not win spectrum in the 2010 auction.

The Department of Telecom (DoT) had banned such intra-circle roaming (ICR) agreements, saying they enabled the companies to offer 3G services without buying spectrum. This was challenged by operators before the TDSAT.

“We find and hold that the intra-circle 3G roaming arrangement does not violate any provision of the UAS licence held by the two sides and it is not open to the government to prohibit the petitioners from carrying out the services in terms of the agreements,” said a TDSAT bench headed by Chairman Justice Aftab Alam in an order.

TDSAT also quashed penalties on Bharti Airtel, Vodafone and Idea Cellular and notices issued to Aircel and Tata Tele in this regard.

“We accordingly quash the orders passed by the Committee at the DoT on 15 March 2013 in case of Bharti and on April 5 2013 in case of Vodafone and Idea.

“We also quash the communication issued by the Central Government against Aircel and Tata Teleservices dated 23 December 2011,” the tribunal said.

Sources said the government plans to challenge the TDSAT order before the Supreme Court.

The tribunal also said that same yard stick would ‘equally’ apply if ADAG group firm RCom and government controlled telecom firms enter into intra-circle roaming (ICR) arrangements with other operators.

The tribunal was of view the DoT prohibition on intra circle roaming between the operators on 3G network would leave the network unutilised.

“The prohibition of intra-circle 3G roaming would have the direct result of under-utilization of 3G spectrums which is plainly not in national interest,” the tribunal said in its 88-page-long order.

According to the tribunal, ICR agreements between the operators would result in “much fuller and better utilisation” of 3G spectrum and would also increase revenue of provider and the seeker. It would also benefit the government which would get a per centage from the operator as license fee.

“The arrangement is thus beneficial to the consumer – the ordinary man, the operators and the State,” it said.

TDSAT’s order came over petitions filed by Airtel, Vodafone and Idea challenging DoT’s direction to stop 3G intra-circle roaming agreement under which they had also agreed to acquire customers in areas where they did not win spectrum.

Airtel, Vodafone and Idea Cellular won 3G spectrum in 2010 auction. Airtel won 3G spectrum in 13 out of 22 telecom service areas for Rs 12,295.46 crore, Vodafone in 9 for Rs 11,617.86 crore and Idea Cellular in 11 circles for Rs 5,768.59 crore.

DoT issued notice to Airtel, Vodafone and Idea on December 23, 2011 asking companies to stop 3G ICR within 24 hours and report compliance but the order was challenged by telecom operators.

Tata Teleservices and Aircel too had signed 3G ICR but immediately called off their agreement after DoT issued notice to them.

Airtel had sought access to Vodafone’s 3G network in four service areas — Maharashtra, Kolkata, Haryana and UP East.

Vodafone accessed six 3G circles of Airtel– Assam, Bihar, Karnataka, North East, Rajasthan and UP West besides 7 circles of Idea Cellular– Andhra Pradesh, Himachal Pradesh, Jammu and Kashmir, Kerala, Madhya Pradesh, UP West and Punjab.

Idea is yet to start 3G services in Punjab.

Under the agreement, Idea Cellular secured right to provide 3G service using Vodafone’s network in Delhi, Tamil Nadu, Chennai and Kolkata.

In July 2012, TDSAT had given a split verdict. One bench member ruled in favour and other member of ordered against.     THe DoT again issued notice to telecom operators asking them to stop 3G ICR services along with penalty cumulatively amounting to about Rs 1,200 crore.

Telecom operators—Airtel, Vodafone and Idea Cellular– then approached Delhi High Court which ruled in favour of DoT’s decision to hold the 3G roaming pact of the telecom major as illegal.

Telecom operators then moved the Supreme Court against the order of the high court and sought that the case be transferred to TDSAT.

The apex court allowed telecom operators to move their case to TDSAT in September, 201. It, howver, had put a ban on adding new customers.

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