Telcos to be asked to stop 3G services outside their circles

Govt to issue notices on Friday operators may move court

With the Department of Telecommunications on Friday terming inter-circle 3G roaming pact illegal and asking three telecom operators to stop offering services in circles where they do not have spectrum, a fifth of the 30 million 3G telecom users in the country face the spectre of their services, which offer high-speed internet, getting switched off.

DoT announced that Bharti Airtel, Vodafone and Idea Cellular, the three telcos that had entered into an inter-circle roaming pact last year to offer 3G services in circles where they did not have spectrum, would have to stop their services.

Speaking at a seminar, DoT Secretary R Chandrashekhar said: “A decision had been taken (on 3G roaming pact) and notices will go out. These are showcause notices, as well as advisories to stop services with immediate effect. I expect they will be sent out today.”

The companies would be given 60 days to respond to the notices that asks why action should not be taken against them for violating rules.

Surprised at the government’s stand, the impacted telcos are working on an alternative plan, of going to a high court to seek a stay on the decision. A lawyer who advises the telcos said: “We will probably ask for a stay from a high court, as the TDSAT had given a split verdict on the issue. After that, we will challenge the showcause notice in the Supreme Court, if needed.”

The telecom companies say the move will hit their current subscribers and will be against consumer interest. Cellular Operators Association of India Director General Rajan Matthews says: “Inter-circle roaming was a win-win for everyone, especially consumers, who had more choice of services. Our estimates are that 30 million customers use 3G services and about 20 per cent of them will be on roaming services.” COAI executives also said this could bring down competition in a circle and lead to higher tariffs.

RAISING THE SPECTRE

A chronology of key events

• 2010: Government auctions 3G spectrum. Bharti Airtel wins 3G bandwidth in 13 of the country’s 22 service areas, while Idea gains access to 11 and Vodafone nine
• Jul 2010: Three companies sign an inter-circle roaming agreement to use each other’s networks
• Sep 2011: DoT asks Bharti Airtel, Vodafone and Idea to refrain from offering services in circles where they do not have 3G spectrum. Operators differ; say the practice is allowed under the Unified Access Service Licence rules
• Dec 2011: DoT rules such pacts illegal and asks the operators to stop offering 3G services beyond their licensed circles
• Bharti Airtel, Vodafone Idea, along with Tata Teleservices and Aircel, move TDSAT against the DoT ruling
• Jul 2012: TDSAT gives split verdict; seeks to overturn DoT’s order
• A DoT official writes to Additional Solicitor General
• A S Chandok; seeks his opinion on the legal position in applicability of the TDSAT order
• Aug 2012: ASG says DoT can proceed to take action against the telcos; clarifies that showcause notice for imposition of penalty, including cancellation of licences, can be issued
• Sep 28, 2012: DoT Secretary R Chandrashekhar says telcos will be issued showcause notices for entering into 3G roaming pacts and advisories asking them to stop services

However, many say the 3G inter-circle roaming decision is a test case for the new battle brewing among new operators and incumbent GSM players in the 4G space. They say, with Reliance Infotel as the only pan-Indian 4G player, many GSM players who have spectrum only in a few circles (like Bharti, Aircel, Idea) could form a similar pact for pan-Indian services and take on Reliance if it is allowed. But, the scenario could change if it is eventually disallowed.

The inter-circle roaming pact had been necessitated because no single telco could get spectrum in all of the country’s 22 circles in the 3G auction in 2010. To ensure they could offer services across the country, the three top telcos had entered into an inter-circle pact.