Airtel may face higher penalty

Operator has earned money by offering the 3G service in seven circles where it does not have required spectrum

The Department of Telecommunications (DoT) is likely to impose an additional penalty of Rs 204.35 crore to the country’s largest telecom operator by subscriber base Bharti Airtel for offering 3G services in the seven service areas, through intra-circle roaming pacts with other operators, where it does not have required spectrum.

According to a recent discussion, the department has found while the operator has earned money by offering the 3G service in the seven circles where it does not have required spectrum, it has not paid the spectrum usage charges (SUC) for the same.

According to an audit, DoT has given undue advantage of Rs 204.35 crore to Bharti Airtel on SUC.  The audit has also pointed out that by offer service through intra-circle roaming pacts Bharti Airtel has got benefit of savings by not bidding in the auction for required 3G spectrum for the seven telecom zones.

The company, noted the audit report, should be made liable to pay a proportionate amount of the bid amount paid by successful bidders in the seven areas, for the period of its use of 3G spectrum. Upto March 31, 2013, the audit noted, the charges would be Rs 521.33 crore.

However, the draft demand notice does not include this amount.

Last year, DoT had issued a notice to Bharti Airtel asking it to stop offering 3G service through intra-circle roaming pacts with other operators, and had imposed a penalty of Rs 350 crore (Rs 50 crore for each circle).

In its notice to Airtel, DoT had asked the operator to stop 3G services in seven circles — Haryana, Maharashtra, Uttar Pradesh (East), Kolkata, Gujarat, Kerala and Madhya Pradesh.

Following this, Bharti Airtel moved Delhi High Court and then Supreme Court. Early this week, the apex court has allowed Bharti Airtel to move the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on the 3G intra-circle roaming agreements issue and has said that the tribunal should decide on the case by end of December.

DoT had also imposed penalty of Rs 450 crore on Vodafone and Rs 550 crore on Idea Cellular for offering 3G services through intra-circle roaming pacts where they did not have required spectrum.

Airtel, Vodafone and Idea had won 3G airwaves in 13, nine and 11 circles, respectively, through auction in 2010. Tata Teleservices and Aircel had also forged the 3G roaming agreement, but had stopped the same after DoT began investigation on the matter in 2011.