3 years after govt banned roaming, TDSAT upholds it
Given how telecom firms invested R68,000 crore in bidding for 3G licences, and another R15,000-20,000 crore each in rolling out networks, it was never clear why the government, in 2011, decided to go after them and levy penalties for entering into intra-circle roaming agreements with one another—while a penalty of R350 crore was imposed on Bharti Airtel, it was R550 crore for Vodafone and R300 crore for Idea. There were, as this paper had pointed out three years ago, several reasons for why this was wrong, some practical and some legal. For one, since the government didn’t have enough spectrum to issue more licences, no firm had spectrum across the country. Since the only way to ensure all Indians got access to 3G broadband services was to allow intra-circle roaming, it made practical sense to allow this—more so, since the government’s own targets for broadband penetration critically depended upon the spread of mobile services like 3G. As for the argument that allowing roaming deprived the government of revenues, this was disingenuous. For one, with more than enough takers for whatever 3G spectrum has been put on auction, there has been no loss of interest due to roaming—the argument made was that, with intra-circle roaming, telcos would no longer bid fat entry fees for 3G services. As for annual revenues the government got from 3G services, since the revenues of the firm doing the roaming get added to the original licencee’s revenues, there can be no loss.
There were also very good legal reasons for allowing roaming. First, there is no such thing as a 2G or a 3G licence—as the TDSAT has ruled, these are simply spectrum bands, the operative license is the UASL one. Since the government had, on June 12, 2008, amended the UASL licence to allow intra-circle roaming, it was always clear that such roaming would be allowed for those with 3G spectrum as well. To be on the safe side, however, telcos asked the government about this in various open houses prior to the 2010 auctions. In question after question, the government’s reply was the same: intra-circle roaming is covered under the UASL licences so, yes, it will be permitted for 3G spectrum. As part of the auction process, all questions asked during the open houses and the government’s replies to these were given to bidders along with the bidding document—in other words, the government’s assurances were put down in writing.
Naturally then, it came as a big surprise, when the government turned around and said that intra-circle roaming was illegal and then slapped large penalties on all telcos who were doing intra-circle roaming. Now that the TDSAT has ruled against the government, perhaps the worthies in the telecom ministry should be asked to explain the rationale for their arguments which the TDSAT has said were “misleading”. There cannot be a bigger indictment than the portion of the judgment which says “the government of India cannot be seen playing games in a matter of national importance”.
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Apart from ending a three-year ordeal for telcos Bharti Airtel,Vodafone and Idea Cellular and quashing R1,200 crore of penalties levied on them, the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) on Tuesday ripped into the government’s order which prohibited intra-circle roaming for 3G services.
In a hard-hitting, 88-page judgment, TDSAT chairman justice Aftab Alam and member Kuldip Singh called the department of telecommunication’s stand “misleading”, its basic premise “seriously flawed... and its extension to spectrums... even more fallacious” and said its stopping of intra-circle 3G roaming violated the telcos’ fundamental right to do business guaranteed under Article 19(1)(g) of the Constitution.
The telcos had argued that, apart from the fact that their universal access service licence (UASL) allowed them to do intra-circle roaming, the government had even told them in writing — at the time of the 3G auctions in 2010 — that such roaming was permissible. When the DoT’s counsel argued that it were the licence conditions that mattered more, the telecom tribunal came down heavily on the government.
On DoT’s contention that the UASL allowed intra-circle roaming in 2G spectrum but not in 3G spectrum, TDSAT said there was no such thing as 2G and 3G licences, there was just one UASL. The judgment says, it is “fundamentally incorrect to describe 900 MHz and 1800 MHz bands as ‘2G spectrums’ and 2100 MHz band as ‘3G spectrum’”. The ruling stated that since DoT allowed intra-circle roaming in the UASL (referring to allowing it in the case of 2G spectrum in 2008), then the same cannot be disallowed in the case of 3G.
The TDSAT reserved its harshest criticism for DoT’s argument that while it was true the government had given certain answers to the queries of the telcos, it was the licence conditions that would prevail. The order reads: “The queries were made in earnest and the Government of India was supposed to give its answers with full responsibility. The Government of India cannot be seen playing games in a matter of national importance such as allocation of spectrums that affects not only the operators but is crucial to the promotion and growth of communication in the country.”
Welcoming the judgment, Rajan S Mathews, director general of Cellular Operators Association of India — the GSM industry body — said, “TDSAT has recognised the stand of telecom operators on the basis of which they made aggressive bids for 3G spectrum. The judgment also benefits customers who will have more choices now. Moreover, operators can now freely invest in network coverage.”
Analysts also viewed the judgment as “positive” for the telecom industry. “It will allow spectrum sharing and optimal utilisation of precious spectrum”, said Hemant Joshi, partner, Deloitte Haskins & Sells, adding that it will help in further proliferation of 3G services across the nation and operators can concentrate on their 3G service roll-outs and marketing.
Airtel through the intra-circle roaming (ICR) agreement had sought access to Vodafone’s 3G network in four service area — Maharashtra, Kolkata, Haryana and UP East. Vodafone had access to six 3G circles of Airtel — Assam, Bihar, Karnataka, North East, Rajasthan and UP West, besides seven circles of Idea Cellular — Andhra Pradesh, Himachal Pradesh, Jammu and Kashmir, Kerala, Madhya Pradesh, UP West and Punjab. Meanwhile, as per the pact, Idea Cellular had secured rights to provide 3G services using Vodafone’s network in Delhi, Tamil Nadu, Chennai and Kolkata.
Tata Teleservices and Aircel too had signed a 3G ICR pact but immediately called off their agreement after DoT issued notices to them.