3G roaming deals may lead to cartelization in future actions : DoT to tell PMO

NEW DELHI: The telecoms department will tell the Prime Minister’s Office that accepting mobile phone companies stance on 3G roaming pacts could lead to ‘cartelization among bidders in future auctions causing loss of possible revenues to the government’.

The DoT, in its draft response to the PMO, has said that both sector regulator Trai and the law ministry, had endorsed the stance of its internal wings, that 3G roaming deals amongst operators violate mobile permits and were non-tenable on legal, economic and technical grounds.

The DoT move comes as leading GSM operators - Bharti Airtel, Vodafone and Idea Cellular - while defending their 3G roaming pacts, had also sought the intervention of Prime Minister Manmohan Singh to resolve the issue.

In a hard hitting letter to Prime Minister Singh, Bharti Airtel Chairman and Managing Director, Sunil Mittal, Idea Cellular Chairman, Kumar Mangalam Birla and Vodafone Group's CEO, Vittorio Colao, had said that the government must allow 3G roaming deals or refund the money they paid for these airwaves.

"In the event 3G intra-circle roaming is now deemed impermissible, then, it would be clear breach of our contract and the pre-auction confirmation given by the Government. In that eventuality, 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 November 21 letter of the telecom honchos had said.

The three chief executives had also added that any move to disallow 3G roaming pacts would be ‘tantamount to reneging on the government's promises and the Q&A confirmations provided before the 3G auctions’.

Operators such as Bharti, Idea, Vodafone and Aircel have signed up 3G customers across the country riding on bilateral roaming agreements that allow these firms to use each other's airwaves and offer high-end data services even in regions where they do not have third-generation spectrum.

But the telecoms department, in its draft response, has clarified that while it had said ‘that customers of those operators who did not win 3G spectrum in a service area, would be allowed to roam on the 3G networks of other operators', it had also added that such pacts were to be governed by the terms and conditions of licence’.

“This agreement (3G roaming deals) is more in the nature of Mobile Virtual Network Operator (MVNO) than roaming. However, at present, MVNO is not part of the government telecom policy,” the DoT note said. Its draft response further clarified that terms of using 3G spectrums had said that for ‘providing these services, the operator must build a network using third generation airwaves and meet rollout obligations’.

“As far as roaming in concerned, by definition a roamer can avail the same set of service on the visited network as he was availing in the home network. In the present case, a subscriber who has enrolled for 3G services with an operator who does not have 3G spectrum, has to continuously remain on the other operators’ network in a roaming mode. Further, it has to be seen in the light of the concept of roaming, which is applicable when in a given geographical area the network coverage of the home network is not available. Roaming is primarily a short term arrangement for seamless service in uncovered area,” added the draft response of the DoT to the Prime Minister’s Office.


It also points out that the meaning of permitting intra-circle roaming on 3G network was not to permit a non-3G spectrum holder to offer high-end services. If the meaning assumed by operators for intra-circle roaming is taken as correct, there is a distinct possibility of cartelization among bidders in future auctions causing possible loss of revenue to the government,” the DoT note said. There will also be an impact on revenue from spectrum usage charges collected from operators, it added.

Earlier this week, a top official in the telecoms ministry had said that the controversy surrounding 3G roaming deals that mobile phone companies have signed amongst themselves, is likely to be resolved when the new telecoms policy is implemented early next year. This is because, the new telecoms policy will introduce a pan-India mobile permit, doing way with the existing system of having 22-individual region-specific permits, and the concept of roaming will therefore disappear if operators migrate to the new regime, this official had explained.