Hardening its stance on the 3G roaming dispute, the Department of Telecom is exploring the option of revoking the spectrum allocated to three telecom companies.
The DoT will issue a show-cause notice to Idea Cellular, Bharti Airtel and Vodafone India asking the operators to explain why the 3G spectrum allocated to them should not be scrapped for violating licence conditions.
Roaming pacts
While mobile licences allow operators to enter into roaming agreements, in the case of 3G, the three operators have gone a step ahead and are selling connections even in areas where they do not have spectrum.
This has been made possible because the three operators entered into an agreement wherein an operator that does not have 3G spectrum in a region offers services riding on another player’s spectrum. For example, in Madhya Pradesh, neither Bharti Airtel and Vodafone has 3G spectrum, but they offer services on Idea Cellular’s spectrum.
Two sets of violators
According to the DoT, this has created two different sets of violators — operators that sought others’ spectrum and another set of companies that acted as givers. While the DoT has already slapped financial penalty on the operators that sought spectrum, a fresh set of show-cause notice is being readied for players that gave the radio frequency allocated to them.
“Under the licence rules, it is clearly stated that the DoT can revoke the 3G spectrum if the operator is found to be in breach of the conditions of the award of spectrum,” said a top DoT official.
Breach of contract
“The penalty on operators that gave spectrum could be harsher than on those that took used the facility because the former is in breach of a contract signed at the time of awarding spectrum,” the official added.
DoT’s move, if implemented, will intensify the battle as telecom companies said they will challenge the new notice in court. Already, the three operators have dragged the Department to the court on the earlier order asking them to pay penalty for seeking spectrum. While the court is hearing the case, the operators have also been told to stop selling any new 3G connections.
‘Not illegal’
According to the companies, they are not doing anything illegal. Bharti Airtel, in its submission to the court, has said that the DoT itself had allowed such roaming agreements prior to the 3G auction in 2010. “Any determination now that this might not be the case, would fundamentally alter the legal and economic basis on which the business case for 3G bids was evaluated, inevitably leading to a requirement to either refund to the bidders or re-run the auctions,” the CEOs of telecom companies had said in a letter to the Telecom Ministry.
The DoT is, meanwhile, getting the fresh show-cause notice vetted by its legal experts.