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Intra Circle 3G Deal Helps Vodafone Launch 3G In Andhra Pradesh, Kerala

An intra-circle 3G arrangement between Vodafone, Idea Cellular and Bharti Airtel has helped Vodafone launch 3G services in Andhra Pradesh and Kerala, a company spokesperson confirmed to MediaNama. The 3G launch in Kerala was on Idea Cellular’s network, and within a few weeks, Vodafone will be launching 3G services in the UP West Circle. Of of our readers had alerted us to the fact that Vodafone doesn’t have 3G spectrum in Andhra Pradesh.

It had been reported by The Economic Times earlier this year that the companies were in discussions for a 3G roaming arrangement, but I don’t recall it being formally announced. The details of the arrangement are not known, but I think we will see more launches from the trio soon.

What They Need

Assuming that all three telecom operators are able to provide 3G services across India, here’s how the sharing would pan out:

– Airtel: won spectrum in 13 circles, and needs spectrum for 9 circles. It will need to take spectrum from Idea for 3 circles and Vodafone for 1. In 4 other circles, it needs to choose between Idea and Vodafone. Airtel will be the sole provider of spectrum for 5 circles
– Idea Cellular won spectrum in 10 circles, and needs spectrum 12 circles. It needs to take spectrum from Vodafone in Kolkata and Airtel in 6 circles. In four other circles, it can choose between Airtel and Vodafone.
– Vodafone: Vodafone Won spectrum in 9 circles, and needs spectrum for 13 circles. It can’t launch services in Orissa, can launch services with Airtel in 6 circles, and Idea in three. In three other circles, it needs to choose between Idea and Airtel, and it will probably be Idea.

3G Auction Results (more details here)

Download a printable version of the chart (pdf)

Our Take

An Intra Circle Roaming Arrangement doesn’t sound very different from ‘Spectrum Sharing”. We don’t think there is anything wrong with spectrum sharing, as long as allocation of spectrum is done through a transparent auction. We’ve written earlier about the need for something on the lines of a spectrum exchange that allows for a market based determination of cost of spectrum, and one that is not on the basis of hoarding of spectrum.

In our opinion, the India’s 3G auctions were a disaster – while they may have brought the Indian government the revenue they needed to address a burgeoning fiscal deficit, they were based on scarcity, thus driving up cost of spectrum for the service provider, and in turn, leading to a high price of data access for the consumer.

This begs the question: was the goal of the Government to make money or to benefit citizens (consumers)?

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