Reiterate demand for refund of auction money if roaming pacts illegal.
After writing to minister Kapil Sibal to return their third-generation spectrum licence fees if intra-circle roaming pacts are to be now considered illegal, top telecom operators have sent a joint letter to the Prime Minister with the same demand.
Bharti Airtel, Idea Cellular and Vodafone Essar have said they want a refund of the money they paid in last year’s auction for the 3G spectrum, with interest and compemsation for their capital investments in this regard. In their strong letter to the PM, they’ve said it would be breach of contract if 3G roaming was now deemed impermissible.
The government had given a pre-auction confirmation on this point, said Sunil Mittal of Airtel, Kumar Mangalam Birla of the Aditya Birla Group (which has promoted Idea Cellular) and Vittoria Colao of Vodafone Group Plc in the joint letter. It could not now insist on going back.
“In that eventuality,” the letter adds, “we request that our spectrum auction payments be refunded to us, with interest, along with, compensation for all the capital investments made by us.”
The three companies, through their roaming agreement, are offering services in circles where they don’t hold 3G spectrum. While Vodafone has spectrum in only nine circles, it offers 3G services to its customers in 20 circles. Airtel has 3G spectrum in 13 circles but offers 3G services in 20 circles. Idea has 3G spectrum in 11 circles but offers 3G services in 19 circles. The country already has about 10-15 million 3G customers.
Earlier, various wings in the department of telecom (DoT) had said that a UASL (unified access service license) licensee cannot offer 3G services. And, that 3G roaming agreements between these three companies amount to their becoming mobile virtual network operators (MVNO), not allowed under current policy. An MVNO firm offers mobile services on other operator’s network and does not have its own licensed spectrum and infrastructure/network. The MVNO policy is currently being reviewed by DoT.
The Telecom Regulatory Authority of India supports DoT’s view, saying such roaming pacts on sharing spectrum seem to be a “violation of the terms and conditions of the licence”.
Trai says the operators’ action could have “serious financial implications” for the government. That is because the operators could provide 3G services in circles where they had not paid for the spectrum auctioned.
In their letter, the three leading companies say their licences were specifically amended in 2008 to incorporate the right to do inter-circle roaming without any caveat or restriction of technology or spectrum. They also point out that such an agreement enhances competition and consumer choice and, so, it is “powerfully in the interest of consumers”.
The three also argue that even DoT had, in a communication to Trai, clearly stated that “intra-service area roaming in 3G networks where one of the operators does not have 3G spectrum shall not be treated as spectrum sharing”.
Government-owned Bharat Sanchar Nigam has taken strong objection to the 3G roaming agreements. It says such pacts would make its 3G business unviable and add to its financial losses.
