The Department of Telecom (DoT) has issued notices to Vodafone India and Idea Cellular cancelling their intra-circle roaming agreements that allows telcos to offer 3G services in the circles where they do not have spectrum, reports Business Standard. The report states that DoT has also penalized Vodafone India with Rs 550 crore and Idea Cellular with Rs 300 crore for violation of licence norms.

Last month, DoT had filed a similar notice against Bharti Airtel to stop offering 3G services in seven circles where it does not hold spectrum. It was also indicated that the telecom minister Kapil Sibal had apparently approved a DoT committee recommendation to impose a Rs 50 crore penalty on each of these seven Airtel licenses.

Subsequently, Airtel had filed a plea with the Delhi High Court challenging the Department of Telecom (DoT) notice. Last week, the Delhi High Court had lifted the stay on the government order and has asked Bharti Airtel to stop providing 3G services in seven circles that it did not win spectrum in the 2010 3G spectrum auction.

Following this, Bharti Airtel had apparently filed a petition with the Supreme Court seeking a stay on the DoT order, as indicated by a The Hindu BusinessLine report and the Supreme Court had ordered a status quo on this issue until the next hearing scheduled on April 11 and had asked DoT not to take any forceful actions against Bharti Airtel during the period, as indicated by a separate The Hindu BusinessLine report.

On 3G Intra Circle Roaming Arrangements

The intra-circle roaming arrangements between telecom operators allowed them to offer 3G services to their customers, despite not having won spectrum in the India’s expensive 3G auctions. Such an activity – where stakeholders that are supposed to be competing end up collaborating and sharing spectrum can have an impact on the revenue generated for the government via auctions. The Indian government has held two largely unsuccessful 2G spectrum auctions recently with most telecom operators not participating, due to high base price.

3G Intra-Circle Roaming Case Till Now

– June 2011: Vodafone had launched 3G services in Andhra Pradesh and Kerala due to an intra-circle 3G arrangement between Vodafone, Idea Cellular and Bharti Airtel.

– July 2011: Vodafone had announced that it had inked agreements with Bharti Airtel and Idea Cellular to allow operators to offer 3G roaming services in areas where it doesn’t have licenses to operate 3G services.

– October 2011: TRAI had reportedly sent a letter to the telecom secretary R Chandrashekar, highlighting that telecom operators had begun offering 3G services in areas not allocated to them, wherein they did not pay a license fee.

– November 10, 2011: Idea MD Himanshu Kapania had mentioned that the NIA document issued by the DoT prior to the auction had clarified that the 3G auction was for spectrum, and did not in anyway modify the license condition of the operator.

– November 30, 2011: Vodafone, Idea Cellular and Airtel had jointly written a letter to the Prime Minister of India asking them for a refund of the spectrum auction money with interest, in case the ICR roaming arrangements were to be declared illegal.

– December 7, 2011: The Prime Minister Manmohan Singh had said that the Government was looking into the operator’s concerns and was in the process of formulating new policies to address them.

– December 10, 2011: R Chandrashekhar had said that DoT had received inputs from all concerned agencies, and the verdict was unanimously against permitting 3G intra circle roaming arrangements.

– December 14, 2011: Aircel and Tata Teleservices scrapped its 3G intra-circle roaming agreement for providing 3G services in each other’s circles.

– December 22, 2011: DoT had announced that these arrangements were illegal since the agreements were against the telecom licenses and would lead to loss of revenue to the government.

– December 23, 2011: DoT sends notices to Airtel, Vodafone and Idea, ordering them to scrap the 3G intra-circle roaming pact, since these pacts were illegal.

– December 24, 2011: Airtel, Vodafone and Idea had moved to Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against the directive and had accused the government for impeding the growth of mobile broadband in the country and acting in a non-transparent way. The telcos also noted that they had received prior explicit written clarifications from DoT prior to the auction regarding this matter.

– December 24, 2011: TDSAT had restrained DoT from taking any action against the operators over the 3G agreement until January 3.

– July 3, 2012:  TDSAT had delivered a split verdict on the 3G intra-circle roaming pacts.

– August 1, 2012: The Law Ministry had given its nod to the Department of Telecom for taking action against telcos that have been offering 3G services in service areas where they were not allotted 3G spectrum via Intra-circle roaming agreements.

– September 28, 2012: DoT had issued show cause notices to telcos including Airtel, Vodafone and Idea Cellular to stop 3G intra- circle roaming agreements.

– October 3, 2012: Bharti Airtel had reportedly moved to the Delhi High Court challenging the DoT notice to stop 3G intra- circle roaming agreements.

– October 4, 2012: The Delhi High Court had granted a stay on the DoT order and had asked Airtel to reply to the show cause notice issued by DoT within 60 days and had sought details related to the revenue and customers that it gained from the ICR arrangements.

– December 22, 2012:  DoT had reportedly sent show cause notices to Vodafone, Idea, Tata Telecommunications and Aircel, asking them to stop offering 3G services in areas where the operators don’t have spectrum.

– February 8, 2013: Idea Cellular had reportedly filed a plea in the Delhi High Court, challenging DoT’s move to introduce a clause into the letter of Intent, which didn’t allow telcos to use 3G spectrum of another operator under the unified license regime. Letter of Intent was provided to all service providers who had secured spectrum in the 1800MHz band in the November 2012 auction.

– March 14, 2013: The Delhi High Court had apparently stayed DoT’s move to introduce the 3G spectrum clause into the letter of Intent, provided to telcos that had secured spectrum in the November 2012 auction.

March 18, 2013: The Economic Times reports that the Delhi High Court has allowed Airtel to continue to providing 3G services until May 8th. More here.

April 5, 2013: Delhi High Court has lifted a stay on the government order and has asked Bharti Airtel to stop providing 3G services in seven circles that it did not win spectrum in the 2010 3G spectrum auction, reports The Hindu Businessline.