A big relief for telcos in India: The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has reversed the government ban on 3G Intra-circle roaming agreements that allows telcos to offer 3G services in the circles where they do not have spectrum, reports The Times Of India.
The tribunal mentions that these agreements do not violate any conditions mentioned in the Unified Access Service Licence (UASL) license and are therefore valid. Interestingly, it also mentioned that such pacts could help in better utilisation of 3G spectrum in the country and thereby increase the revenues of both the Government and the telecom operator.
DoT’s penalty on telcos quashed
In addition to this, TDSAT has also quashed the cumulative penalties of Rs 1,200 crore imposed by the Department of Telecommunications (DoT) on Bharti Airtel, Vodafone India and Idea Cellular for violation of licence norms in April last year.
DoT now has the option to contest this judgement in the Supreme Court. Mint cites two unnamed senior DoT officials to state that it is likely to appeal in the Supreme Court once a new government comes in power.
Intra-circle 3G roaming agreements helps telcos to offer 3G services to their customers in areas where it doesn’t have license to operate 3G services, thereby getting a pan-India 3G footprint.
This could further drive the 3G penetration in the country, which has been witnessing a staggering mobile Internet growth over the past few quarters. Besides this, consumers will also get to choose from more operators for 3G services. Note that there are currently only three private operators in each circle offering 3G services.
Back in 2011, India’s top three telcos Airtel, Vodafone and Idea Cellular had inked a Intra-circle 3G roaming agreement which allowed Vodafone to launch 3G services in Andhra Pradesh and Kerala. Aircel and Tata Docomo had also inked a similar agreement, although it was scrapped after the Government deemed them illegal.
Earlier this week, Reliance Communications had also signed a 3G inter-circle agreement with other telcos to offer pan-India 3G roaming service for its new and existing subscribers. The telco however had told Medianama that that this is just a roaming partnership which has been allowed by DoT and it has no intention to sell its services to customers outside its own 3G circles. We however wonder whether the telco will be looking to change its plans, following this TDSAT judgement.
3G Intra-Circle Roaming Case Timeline
– 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 15, 2013: DoT had issued a notice against Bharti Airtel to stop offering 3G services in seven circles where it does not hold spectrum and had also imposed a penalty of Rs 350 crore on Airtel (Rs 50 crore for each of seven Airtel licenses). Subsequently, Airtel had filed a plea with the Delhi High Court challenging the Department of Telecom (DoT) notice.
– March 18, 2013: Delhi High Court had reportedly allowed Airtel to continue to providing 3G services until May 8th, according to a The Economic Times report.
– April 5, 2013: Delhi High Court 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. Bharti Airtel had filed a petition with the Supreme Court seeking a stay on the DoT order and the Supreme Court had ordered a status quo on the issue.
– April 9, 2013: Department of Telecom (DoT) had issued notices to Vodafone India & Idea Cellular cancelling their intra-circle roaming agreements. It had also penalized Vodafone India with Rs 550 crore and Idea Cellular with Rs 300 crore for violation of licence norms.
– September 24, 2013: Supreme Court asks Bharti Airtel to move their case to TDSAT, as per an NDTV report.
– April 29, 2014: TDSAT reverses the ban