Airtel roams beyond alloted 3G circles, gets DoT notice

The Department of Telecom has warned telcos against continuing 3G intra circle roaming since this could increase the amount of penalty such companies would have to pay eventually.

As of now, DoT has issued a show cause notice to Bharti Airtel asking it to explain why action should not be taken for offering 3G services in those circles where it did not bag 3G spectrum. The DoT is seeking immediate suspension of 3G service but has provided Bharti a 60-day window to explain why penalties should not be imposed.[caption id=“attachment_484901” align=“alignleft” width=“500”]  Roaming into trouble. [/caption]

Top DoT officials told Firstpost that more such notices will be going out. They also said that if telcos are ultimately found guilty, not only will they have to shell out the mandatory Rs 50 crore per circle penalty, they will also have to surrender revenue earned by offering 3G roaming in this 60-day period as “undue enrichment” has already been identified as a sum which will accrue to the government.

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“If they continue offering 3G roaming despite the show cause notice, they are doing so at their own risk”.

These sources said the Delhi High Court, which stayed the order banning 3G roaming pacts last week, only prevents DoT from taking any coercive measures against Bharti.

According to documents reviewed by Firstpost earlier, DoT is already seeking legal opinion on ‘unjust enrichment’. Put simply, this means that apart from charging for licence violation, DoT also wants to recover the revenues that telcos have gained by offering intra-circle roaming on 3G services. So, not one but two show cause notices may be on their way.

Bharti, Vodafone, Idea and Aircel had won 3G airwaves in 13, 9, 11 and 13 circles, respectively and their roaming pacts ensured that customers could access high-speed data services on a pan-India basis. There is no clarity yet on whether Tata Teleservices would also be issued a notice by DoT.

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Bharti is a ’taker’ of 3G spectrum, or uses high-end frequencies of other operators, in seven regions where it does not have 3G spectrum bandwidth. The show cause notice sent by DoT seeks to levy total damages of Rs 350 crore (Rs 50 crore per circle) on Bharti. The circles where it has been asked to stop 3G services are Maharashtra, Madhya Pradesh, Kolkata, Uttar Pradesh East, Gujarat, Kerala and Haryana.

The DoT sources quoted earlier said notices are being issued to only the ’takers’ as of now.

Similarly, Vodafone, Idea and Aircel use each other’s networks in circles where they themselves are not present to offer 3G services. Earlier this year, the Telecom Dispute Settlement Appellate Tribunal (TDSAT) gave a split verdict on a petition filed by telcos, challenging an order by DoT to stop such roaming pacts.

The government had raised over $12 billion from 3G auctions in 2010. But no company managed to win airwaves in all of the country’s 22 service zones as the bid prices were much higher than expected - this is what led to ICR pacts.