India’s Department of Telecoms (DoT) has ruled that the national 3G roaming agreement between Bharti Airtel, Vodafone Essar and Idea Cellular is illegal, which could see the three operators slapped with a INR500 million (US$10 million) fine in every region where the deal is in place.
India’s Economic Times newspaper reports today that the Telecom Enforcement, Resource and Monitoring (TERM) unit, a wing of the DoT, has called for the government to take action on the issue, claiming the agreement violates laws around spectrum sharing and MVNOs, both of which are not permitted under existing rules.
Such roaming deals were seen as a way for operators to offer a nationwide 3G service as none were able to secure 3G spectrum covering the entire the country at auction last year. Bharti, Vodafone and Idea won 3G airwaves in 13, 9 and 11 circles, respectively, and their pact ensured that customers could access 3G services even in regions where they didn’t hold spectrum.
A Vodafone spokesperson told the newspaper that "the arrangement to provide 3G services is in complete compliance and agreement as per government policy and guidelines." Bharti said the company was in "complete compliance with license conditions and all its agreements were as per stated government policy."
The DoT’s ruling that such agreements could be illegal could scupper similar tie-ups between other operators that are thought to be in the pipeline.
For example, state-owned MTNL is seeking a deal that will allow Tata Teleservices and Aircel access to its 3G airwaves in Delhi and Mumbai. Aircel had won 3G airwaves in 13 circles and Tata Teleservices in nine, but both failed to bag spectrum in Delhi and Mumbai, the two key metros areas where MTNL holds spectrum. Aircel and Tata Teleservices are also thought to be close to finalising a separate 3G roaming deal.