The roaming agreement between Bharti Airtel, Vodafone Essar and Idea Cellular on providing third-generation (3G) telecom services must be forbidden without delay, insists their state-run competitor, Bharat Sanchar Nigam Ltd (BSNL).
The department of telecommunications (DoT) and the Telecom Regulatory Authority of India are examining the issue. Last month, a division of DoT had said such agreements did not appear to conform to the rules; however, DoT itself is yet to take a formal stand on the matter.
BSNL made a loss of Rs 1,823 crore in 2009-10 and another of Rs 6,000 crore in 2010-11. It says the deal between these three private sector competitors would make its own 3G business unviable. Apart from this plea, it has told the government the agreement is illegal.
Barring Delhi and Mumbai, BSNL holds 3G spectrum in all telecom circles. The other state firm, Mahanagar Telephone Nigam Ltd has spectrum in these two places. It paid Rs 10,187 crore for the spectrum allotment. Both companies were given 3G spectrum a year before the auction for private competitors and had to match the winning bids.
“The illegal provisioning of 3G services by the private players is resulting in huge competitive disadvantage and disturbance of level playing field to BSNL…stringent action should be initiated against (these) three operators for gross violation of the license conditions,” BSNL has said, in a letter to DoT.
When the spectrum was allocated, it contends, the idea was that a maximum of three operators would get 3G spectrum in any of the service areas, apart from one government-owned firm. With this, BSNL could have achieved 30-35 per cent market share but with private operators providing 3G services in this manner, this calculation ends. “BSNL will have to face competition with 12-14 operators in each and every service area. With this, BSNL will hardly get a market share of 10 per cent. Accordingly, the business case of BSNL will be totally financially unviable and will add to the financial losses.”
Through the roaming agreements, private players are offering services in circles where they don’t hold 3G spectrum.
While Vodafone has spectrum in nine circles, it is offering 3G services in 20 circles. Bharti Airtel has 3G spectrum in 13 circles but offers 3G services in 20. Idea has 3G spectrum in 11 circles but offers these services in 19. The number of circles where 3G spectrum was auctioned was 22. The operators contend their licence conditions allow such provisions.
The BSNL letter adds: “It (allowing such deals) will also (mean) huge losses to the exchequer. In future, in all spectrum auctions, the government will be able to recover only the reserve price, as the operators will make a cartel during the bidding process…after allocation of spectrum, the spectrum will be shared under the garb of intra-circle roaming and all operators will provide the services to their customers.”
