 "telecom")
The move is expected to give the much-needed push to the expansion of 3G services, which have been languishing due to an uncertainty among consumers on whether operators can offer seamless services across the country.
TDSAT also quashed the cumulative penalty of Rs 1,200 crore imposed by the department of telecommunications (DoT) on the three incumbent operators, which together offer services to about 30 million of the country’s 40 million 3G subscribers. DoT officials said it would not be possible to challenge the decision in the Supreme Court, as it was the apex court that had earlier referred the case to TDSAT.
The three operators can now offer pan-Indian 3G services to their customers across all circles, despite having the requisite 2,100-MHz spectrum in only a few. Bharti Airtel has 3G spectrum in 13 of the 22 telecom circles, while Vodafone has it in nine and Idea Cellular in 11.
An earlier order had disallowed the companies from acquiring new subscribers in the circles where they did not possess 3G spectrum, causing a 30 per cent reduction in their data revenues, according to industry estimates. A senior Vodafone India executive, who did not want to speak on record, said: “We have lost a lot of revenue because of the ban. Our 3G customers want seamless services and this (TDSAT decision) will give 3G a big fillip.”
The TDSAT decision will also provide customers more choice and increase competition in the sector. “The decision benefits customers, who will have more choices. Now, operators can freely invest in network coverage, as ICR pacts will allow them to offer better services even without adequate spectrum in all circles,” said Cellular Operators Association of India (COAI) Director-General Rajan Mathews.
Experts also agree that it will give a boost to 3G services. Hemant Joshi, partner, Deloitte Haskins & Sells, says the TDSAT decision will allow optimum utilisation of spectrum and help in further proliferation of 3G services across the country.
“Operators can concentrate on their 3G service rollouts and marketing. This will also benefit the subscribers, as they are not required to change the operator to avail of 3G services. This is in line with the in-principle approval given earlier,” Joshi adds.
Earlier, the ban on ICR for 3G was seen by many as a proxy war in the 4G services space between the incumbent operators and the new entrant Reliance Jio Infocomm. The ban gave Reliance Jio a clear edge over rivals, as it was the only pan-India player with the more efficient 2,300-MHz spectrum in all circles. Rival Bharti Airtel had 4G spectrum in only 13 circles (after buying Qualcomm), while Vodafone and Idea had none. So, without an ICR regime, the three incumbent telcos would have had serious problems in competing with Reliance Jio.
But that was in 2011. With technological and spectrum policy changes, the current policy of technological neutrality has changed the scenario. Under the new regime, spectrum is no longer pegged to one service and operators can use their airwaves to offer whichever service they want — 2G, 3G or 4G.
As a result, though Vodafone India does not have 2,300-MHz (earlier tied to 4G), it can offer 4G services with the 900- or 1,800-MHz spectrum it has across the country. This means, it does not even need to sign ICR pacts for 2,300-MHz airwaves and can take on Reliance Jio by offering 4G services using its 1,800-MHz spectrum.
Mathews agrees: “With spectrum now becoming technology-neutral, operators can offer any service with spectrum of any band. But, if need arises, the operators now have the option of getting into ICR pacts for services.” Mathews, however, says 2,100-MHz still is the most effective band for 3G, because of the huge infrastructure and device ecosystem available globally. And, the TDSAT decision will give a big push to the service. “The question that needs to be asked is, who will compensate the operators for their revenue loss on account of not being able to offer services to new customers.”
DoT had taken Bharti Airtel, Vodafone India and Idea Cellular to court for allegedly violating their licence conditions by offering 3G services, through ICR pacts, in circles where they did not have permits. The department had slapped a penalty of Rs 350 crore on Bharti Airtel, of Rs 550 crore on Vodafone and a Rs 300-crore one on Idea Cellular for providing 3G services outside their licensed telecom zones.
These three had signed ICR pacts for sharing 3G spectrum and offering services across one another’s circle.
CLEARER SIGNALS
The 3G intra-circle roaming pact issue
- 2010: Bharti Airtel, Vodafone India and Idea Cellular sign an intra-circle roaming (ICR) pact for 3G services after none wins spectrum in all circles
- Dec 2011: DoT sends notices to the three companies, asking to stop within 24 hours 3G services through ICR pacts; operators challenge the decision in TDSAT
- Jul 2012: TDSAT gives split verdict; one member rules in favour of ICR, while the other is against it
- Mar 2013: Operators move the Delhi High Court, which rules against ICR; operators challenge the decision in the Supreme Court
- Sep 2013: Apex court allows operators to move the case to TDSAT
- Apr 2014: TDSAT decides to allow ICR, quashes penalties imposed on the three telcos
LIKELY IMPLICATION
- Gainers: Bharti Airtel, Vodafone India, Idea Cellular
- The TDSAT order will allow the three incumbent operators to offer 3G services across India’s 22 telecom circles
- The order also paves the way for such arrangements among operators for other spectrum bands, if required
