Mobile operators, including Airtel, Vodafone and Idea Cellular, will be able to offer 3G services across the country, with the telecom tribunal holding their roaming pacts to be valid.
The three operators had inked an intra-circle roaming agreement to offer 3G services across the country, using each other’s spectrum. This was because none of these players had won pan-India spectrum individually in the auctions held in 2010.
The Department of Telecom had objected to the deal, saying that though roaming is permitted, such an intra-circle arrangement cannot be used to sell 3G connections in areas where operators do not have spectrum. DoT had asked the operators to stop such services and had also imposed penalties.
The Telecom Dispute Settlement Appellate Tribunal (TDSAT) has, however, quashed the penalties and ruled in favour of the operators.
“Allowing intra-circle 3G roaming would result in a much fuller and better utilisation of 3G spectrum. This would increase the gross revenue of both the provider and the seeker of the 3G network, and the Government, having a percentage share in the adjusted gross revenue of the licence holders, would thus be able to get a larger sum as licence fee. The arrangement is thus beneficial to the consumer, the operators and the State,” the tribunal said.
Deal revival possible The impact of the ruling will be felt most by Airtel, Vodafone and Idea Cellular as they can revive their deal to offer 3G services in each other’s circles, and thus get a pan-India footprint.
For example, Idea, which does not have 3G airwaves in Delhi, will be able to offer data services to customers by taking capacity from Airtel and Vodafone.
Other companies, such as Reliance Communication, Aircel and Tata Teleservices, are also expected to form such an alliance.
In particular, the ruling will put Idea, Airtel and Vodafone in a better position to compete with the financially strong Reliance Jio, which is expected to launch its data services, based on 4G technology, this year.
Consumers also benefit as they will have more options to choose from. At present there are only three operators in each circle offering 3G services. “We expect 3G uptake to increase substantially with this order. Overall industry revenue may go up by at least 2 per cent,” said Rajan Mathews, Director General, Cellular Operators Association of India.
Spectrum sharing The other impact will be on the proposed spectrum-sharing policy, which could become redundant after the TDSAT order.
A roaming pact is a form of spectrum sharing without any of the curbs proposed in the draft guidelines, which restrict sharing to operators who own airwaves in the same frequency in a circle.