Govt to telcos: Stop 3G roaming agreements

DoTs decision comes as big setback for Airtel,Vodafone and Idea

The Department of Telecommunications (DoT) on Thursday said it will not allow operators to enter deals that let them provide 3G services in areas where they do not hold spectrum.

The DoT is yet to decide if it will fine telecom companies for such agreements. Bharti Airtel,Vodafone and Idea Cellular,three of the countrys largest operators by subscribers,said their intra-circle roaming agreements do not breach licence terms.

Telecom secretary R Chandrashekhar said,The decision has been taken that 3G intra-circle roaming pacts are in violation of the terms and conditions of the licence. We will be issuing notices asking the operators to stop their service with immediate effect. But on penalty,no decision has been taken yet.

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The Telecom Regulatory Authority of India (Trai) and the law ministry had both said the agreements were illegal under current licence terms.

The development is likely to sour relations between the government and the industry as operators had written to the Prime Minister that the roaming agreements were legal and that if the government termed it illegal,they were willing to surrender the spectrum and their money should be refunded. The PM had assured them that he would look into their concerns.

The decision to scrap such pacts among operators comes at a time when the telecom sector is facing a lot of controversies and the government-industry relationship is at its weakest. The Telecom Commission is expected to take crucial decisions on a host of related issues on December 26.

The operators bids were astronomically high when auctions for 3G spectrum were held in mid-2010,which led to the government earning a massive Rs 68,000 crore.

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The operators have invested another Rs 15,000-18,000 crore to roll out the networks and are slowly in the process of starting the services. None of them are making money on 3G operations,and with a weakening rupee they would take a further hit on repaying their foreign loans.

There can be no relief for the operators in the new telecom policy expected to be announced next month,which has promised to allow sharing of spectrum. Sharing of spectrum will be allowed only among operators who have circle-specific licences,so it is different from allowing intra-circle roaming, a DoT official said.

Though none of the three operators officially commented on the development stating that they are yet to receive any notices from the government,privately they said they would challenge the decision in court.