TDSAT rules in favour of 3G pacts

29 Apr 2014

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has ruled that the controversial 3G roaming agreements signed between Bharti Airtel, Vodafone and Idea Cellular do not violate any licence conditions, the Economic Times writes. TDSAT’s decision overturned penalties levied by the Department of Telecommunications (DoT) on the operators for setting up agreements that would allow them to sign up new subscribers outside of their licensed service areas. According to TeleGeography’s GlobalComms Database, the pacts, which would allow operators to offer 3G services outside of their licensed circles through agreements with other cellcos, were green-lit by the government in the lead-up to the auction of 3G licences after it became apparent that no operator was likely to be able to secure concessions for all 22 licence areas. In December 2011, however, after the 3G concessions had been distributed, the government reneged on its previous agreement and ruled that the practice was illegal. Arbitration between the authorities and the cellcos proved inconclusive at first and in July 2012 TDSAT issued a split decision verdict on the matter. The DoT renewed its case later that year and was supported by the Supreme Court in April 2013, which compromised by ruling that the cellcos could continue to service existing customers but must not sign up new users outside of their licensed areas.

TDSAT’s most recent ruling quashed penalties totalling more than INR12 billion (USD197.48 million) levied by the DoT on Vodafone, Idea Cellular and Bharti Airtel. Responding to the ruling, Rajan Matthews, the director general of industry lobby group Cellular Operators Association of India (COAI), noted that the decision would benefit customers as well as operators as users will have greater choice of provider. Matthews went on, playing down the potential negative impact on future spectrum auctions, saying that cellcos prefer to have greater control of their operations and blaming the excessive pricing for previous tender failures: ‘We know [that] there is not enough spectrum available. Though telecom operators may go for spectrum sharing or this kind of agreement … everyone wants to be on driver’s seat. If there is [a] level playing [field] and spectrum auctions are made reasonable, people will go for it.’

Earlier this week CommsUpdate reported that Reliance Communication (RCOM) circumvented the apex court’s decision, signing inter-circle roaming agreements with Tata Teleservices (TTSL) and Aircel. These deals – unlike those previously signed by Airtel, Vodafone and Idea – apply to roaming only and will not allow the trio to sign up new users outside of their operating areas.

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