Bharti Airtel, Vodafone India and Idea Cellular may have to stop offering 3G roaming in areas where they do not have spectrum by the end of the month.
The Department of Telecom has prepared a notice to this effect that is expected to be sent to the operators over the next few days.
The operators will also be asked to pay a penalty for violating the licence condition by offering 3G services in places where they did not own spectrum.
This has huge implications for the three operators as they will lose their pan-India 3G footprint at a time when archrival Reliance Jio Infocomm is gearing up to launch its data and voice services based on 4G technology across the country.
Soon after the spectrum auctions got over in 2010, Bharti Airtel, Vodafone and Idea Cellular had entered into an agreement to offer 3G services to their subscribers across the country.
Intra-circle roaming
This was necessitated because none of these players had won pan-India spectrum individually. Therefore, they got into a deal which they termed as intra-circle roaming agreement.
The current licence rules permit operators to go in for roaming agreements so that users get seamless coverage as they move from one circle to another. But in the case of 3G services, operators are selling connections even where they do not have spectrum. For example, in Madhya Pradesh neither Bharti Airtel nor Vodafone has 3G spectrum but both have subscribers. This has been made possible because the two operators have entered into an agreement with Idea Cellular.
However, the DoT has taken a view that this was not a roaming arrangement. “If the contention of the operators that they can sell full mobility services using the network of other operators by entering into so-called commercial roaming agreements is accepted, then it would tantamount to the position where the companies having the licence to provide the mobile services will not establish any kind of network to provide the services and may not bid for spectrum during the auction process,” stated a draft notice to be issued to Airtel.
“These licensees, by selling 3G services without having their own 3G spectrum, are working like Mobile Virtual Network Operator, which is not permitted and hence illegal,” the note added.
The DoT had first issued a show-cause notice in September 2012 asking the mobile operators to explain why no action should be taken against them.
However, the operators challenged the DoT decision in court. The court asked the Department to take a decision after giving a hearing to the operators.