Bharati Airtel is set to face the heat for the alleged sub-letting of 3G spectrum to Vodafone Essar and Idea under the guise of a “roaming agreements.” Telecom Secretary R Chandrashekhar and Member (Technical) JK Roy have approved issuing of a show-cause notice to Bharti Airtel. Since Vodafone and Idea have also entered into similar pacts with Bharti, show-causes notices may also be issued to them.
A sample ‘draft’ show-cause notice has been prepared and sent to Communications Minister Kapil Sibal for his approval and legal vetting on 28 June. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has already given a split verdict on the legality of roaming pacts, with one member holding in favour of the government and the other in favour of the telcos.
Since this leaves the issue unsettled, telecom ministry officials believe that issuing a notice to Bharti Airtel “would not in any way conflict with the ongoing legal proceedings before TDSAT’’ or the courts once the minister approves the same.
A forwarding note along with the draft ‘show cause notice’ says “…these licensee have shared spectrum with other companies who have been found guilty of using such spectrum as it is a violation of their licence conditions. Thus these companies have to share liability of the others by default.”
This is further emphasised by the fact that the same set of companies are ‘givers’ of spectrum at some places and ‘takers’ at other places. Hence, prima-facie, there is a case of violation of licence conditions against these companies as givers of spectrum. In view of above and also the fact that the matter is sub judice in respect of the receivers of spectrum, the ministry may take legal opinion regarding the issue of show cause notice.
The draft show-cause notice says: “M/s Bharti has allowed the use of its 3G network for provisioning of 3G services by such companies who do not have 3G spectrum in a particular service area. Thus the company has violated conditions of the UAS Licence Agreement.’’ UAS is Unified Access Service.
“In terms of the said ‘Roaming Agreement’, the company (Bharti Airtel) has in violation of various conditions of UAS Licence and NIA (Notice Inviting Applications) has sub-leased its earmarked 3G spectrum/3G network to M/s Vodafone for commercial benefits. Under the garb of such ‘roaming agreement’ the company has facilitated M/s Vodafone to provide 3G Services without any authorisation,’’ the draft notice reads.
In separate roaming agreements, Bharti Airtel had allowed the use of 3G spectrum to Vodafone and Idea in Assam, Bihar, Karnataka, Mumbai and West Bengal service areas, where both – Vodafone and Airtel – have “no authorisation to provide 3G services/network.’’
“A Licensee who does not have 3G spectrum in a particular service area is not permitted to provide 3G services to its customers in that service area by way of entering into intra-service area roaming agreement with 3G spectrum holders/Licensees,’’ the draft notice says.
The draft show-cause notice has suggested harsh penalties against Bharati Airtel, including cancellation of the licence or imposing financial penalty not exceeding Rs 50 crore for violation of terms and conditions of the licence agreement. “This penalty is exclusive of liquidated damages as prescribed under Clause 35 of the licence agreement,’’ the draft notice says.
Earlier, in a letter to Telecom Regulatory Authority of India, Vodafone had said that the concerns around the roaming agreements were unfounded. “DoT had clearly stated that the roaming policy is applicable to the licences and not to specific bands. Hence roaming will be permitted.’’
DoT has obviously overruled the roaming agreements, arguing that it is as good as subleasing 3G services to Vodafone and Idea, who are not authorised to use these services in the said areas.
It is for Kapil Sibal now to consider whether the show-cause notice should be served on Bharati Airtel. Responding to a Firstpost email query, Sibal said: “No decision yet.’’ In a second email, Sibal said: “As of now no final decision on said issue seems to have been taken by departnment.’’