The 3G syndrome PDF Print E-mail
Thursday, 01 May 2014 03:32
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TDSAT rightly indicts government for playing games with investors in the telecom sector.

A government’s word, you’d think, would count for something. Which is why, when India decided to auction 3G spectrum — ideal for high-speed mobile data connectivity — in 2010, leading telcos went for it. Sure, there wasn’t enough 3G spectrum to go around, but they still invested Rs 68,000 crore in bidding for 3G licences, and another Rs 15,000-20,000 crore each in rolling out networks. After all, 3G spectrum was part of the universal access service licence (UASL), under which they offered 2G telecom services, and that allowed what is called intra-circle roaming. In layman’s terms, that meant if a Vodafone couldn’t get 3G spectrum in Delhi, it would sign up with an Airtel and its customers would access 3G on the Airtel network. Also, before the bidding began, telcos had specifically asked if such intra-circle roaming would be allowed, and the government had said it would be, in writing. The problem was, once the bidding was done and the networks rolled out, the government cracked down on this intra-circle roaming, and fined telcos Rs 1,200 crore for it.

All manner of excuses were trotted out. Intra-circle roaming was permitted only for 2G licences, not for 3G ones; the government would lose revenue if this was allowed for 3G, and so on. Not one of them sounded reasonable. For one, there is no 2G or 3G licence, there is only a UASL, and that allows intra-circle roaming — 2G and 3G are just spectrum bands. If roaming caused no loss of revenue in 2G, why would it in 3G? One argument made was that, were such roaming to be allowed, operators would not bid fancy fees to buy spectrum — but the 3G auctions had been fully subscribed. And the more the number of users on 3G spectrum, the higher the revenue-sharing money for the government.

On Monday, the telecom appellate tribunal took apart the government’s arguments and called them “misleading” and “seriously flawed”. It reiterated that there was no such thing as a 2G or 3G licence, that the UASL allowed intra-circle roaming. And since the government had also given assurances in writing, it said the “government cannot be seen playing games in a matter of national importance”. Bad as the 3G case is, if this syndrome were restricted to just telecom, it would be one matter. But bureaucrats, no doubt egged on by politicians, are playing the same games in, for instance, the oil and gas sector — both incidentally areas where investors, especially global ones, have a lot of money to invest


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