Guess who gains from the ban on 3G roaming pact?

Not everyone is complaining about the Department of Telecom’s (DoT) decision to ask telecom operators to stop their 3G roaming pact with immediate effect.

In a report on the event, HSBC says that in a scenario of regional 3G offerings by incumbent operators without the support of roaming pacts, the only operator to provide pan India data services would be Reliance Industries’ telecom foray. The report, however, cautions that the gains will be limited as the technology used by Reliance to provide voice is not yet proven.

[caption id=“attachment_172287” align=“alignleft” width=“380” caption=“Several reports suggest that the sales numbers for 3G services have been low for most telecom players as the technology was not available everywhere. Reuters”]  [/caption]

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The report says that the final outcome supporting a 3G ban will pave the way for another round of 3G auctions, the key beneficiary of which will be the government.

The roaming ban will affect Bharti Airtel and Vodafone the most as they could lose voice revenues from high-end subscribers in markets where they don’t own 3G spectrum. As Idea is a new entrant in 3G, the impact will not be meaningful, says the report.

Several reports suggest that the sales numbers for 3G services have been low for most telecom players as the technology was not available everywhere. Moreover, if the government does ban the 3G roaming pact, telcos will find very few takers for a technology that will not be available when they are travelling.

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The HSBC report goes on to say that before the 3G auctions took place operators had taken specific clarification from D0T that roaming policy is applicable on a license basis and has nothing to do with the spectrum band.

Separately, roaming is different from spectrum sharing or trading as spectrum remains with the roaming provider. Further, selling 3G SIMs in markets where operators do not have 3G spectrum of their own is not a violation as there is no generation of new radio access network and new numbering and the spectrum stays with the operator who owns it.