Face-off: Telcos appeal against ban on 3G roaming pact

Bharti Airtel, Vodafone’s Indian unit and Idea Cellular on Friday appealed against a government ban on 3G roaming agreements, warning it would hurt much-needed investment in the sector.

Telecom Disputes Settlement and Appellate Tribunal will hear the operators’ pleas on Saturday, the tribunal’s website showed.

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The government’s decision to ban roaming pacts is a blow to the three firms, which currently provide 3G services beyond their licensed zones through the agreements.

The move also adds to uncertainty in the once-booming sector, which is being hurt by fierce competition as well as a probe into a massive telecoms licensing scandal.

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Bharti, Vodafone India and Idea, three of the country’s top four carriers, in separate statements said their roaming agreements complied with the telecoms licensing rules and were as per the telecoms ministry’s clarifications to firms before the 3G airwaves auction last year.

“The reverse stance taken by the DoT (Department of Telecommunications) from its earlier stated position sends a wrong signal, not only within the telecom industry but to the entire business community,” Bharti said.

It said the decision was “arbitrary” and “illegal,” adding the company would take appropriate action to protect its rights.

Vodafone’s Indian unit said the telecom ministry’s decision was “completely unreasonable” and it would take “suitable course of action” to protect its customers’ interests.

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India raised about $13 billion from the last year’s 3G airwaves auction, which attracted much higher bids than expected, and no single company managed to get spectrum in all of the country’s 22 zones.

Operators launched 3G services earlier this year and are currently expanding networks, but the take-up for the premium services, which facilitate faster Internet browsing on mobile phones and services such as video calls, has been slower than forecast.

Idea Cellular, India’s fourth-biggest mobile carrier by subscribers, said it was “deeply dismayed” at the telecoms ministry’s decision.

“It is not only a breach of trust, but also an act that is expected to adversely impact over half the base of mobile users in India and negatively impact investor sentiment,” the company said.

With more than 880 million mobile connections, India’s is the world’s second-biggest telecoms market after China. The telecoms sector in the country is highly regulated.

The government is overhauling its decade-old telecoms rules after a massive licensing scandal came to light last year, but there is little clarity on key issues, including pricing of second-generation spectrum and new rules for mergers and acquisitions in the crowded 15-player market.

On Friday, Bharti shares closed 1.8 percent lower, while Idea ended down 3.6 percent, extending losses from the previous session.

Reuters