Split verdict on 3G roaming pact gives Bharti, Idea a boost

Telecom tribunal TDSAT on Tuesday gave a split verdict on validity of mobile phone operators offering 3G services beyond their licence areas through roaming pacts with its chairman concurring with such a practice, while the other member on the bench differed with him.

The split verdict came on a petition filed by mobile phone companies challenging a government order asking them to stop offering 3G services beyond their licensed circles or zones through mutual roaming agreements. No single company got a pan-India licence, so these pacts were designed to provide seamless connectivity to consumers as well as utilize spectrum that was not being used.

According to DoT, telecom service providers cannot offer 3G service in those circles where the company does not have licence. However, the telecom companies argue that the 3G roaming agreement between the country’s leading operators is both as per existing license conditions and prior explicit written clarifications received from DoT, before the auction.

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The Telecom Disputes Settlement and Appellate Tribunal, today said both sides can appeal at a higher court, according to one lawyer on the case after one judge voted in favour of the government and the other in favour of the mobile phone operators.

The tribunal’s decision was keenly watched by investors in Bharti Airtel , Vodafone’s Indian unit and Idea Cellular - the country’s top three carriers by revenue - which have managed to offer 3G services in most parts of the country because of the pacts. Shares in Bharti rose more than 3 percent while Idea gained over 4 percent.

In a 2010 government auction, Bharti won 3G bandwidth in 13 of the country’s 22 service areas, while Idea gained access to 11 and the Vodafone unit nine.

The telecoms ministry told carriers last December that it was illegal to offer 3G services beyond their allotted zones by mutually agreeing to share their airwaves.

In the same month, the three operators and smaller rivals Tata Teleservices and Aircel challenged the government order before the TDSAT.

Bharti, Vodafone and Idea previously said their roaming pacts complied with telecom licensing rules.

Officials from the telecom ministry were not immediately available for comment.

The two-member bench comprising TDSAT Chairman Justice S B Sinha and Member PK Rastogi differed in theirs findings.

While one member of the tribunal has said roaming pacts between telcos like Airtel, Vodafone and Idea to offer 3G roaming within a single telecom circle are illegal and should be terminated immediately, the tribunal’s chairman Justice S.B. Sinha has ruled that fresh notices should be sent out to the telecom operators by the department of telecommunication, giving them time to respond.

Till there are further directions from the department of telecommunications, or DoT, existing roaming services offered by the telecom operators will not be switched off immediately.

Justice Sinha allowed the telecom operators’ plea against the government’s directive to stop intra circle 3G roaming saying that it was violative of natural justice. But Rastogi dismissed telecom operators plea saying they cannot provide roaming.

The operators would now appeal in higher courts.

The Chairman was of view that DoT (Department of Telecom) had not followed the proper procedure and operators were not given proper time to put their views.

According to Justice Sinha it was a violation of natural justice. Setting aside the DoT’s order to operators to stop ICR (intra-circle roaming), he asked DoT to start the procedure afresh by giving proper time to operators to respond.

Meanwhile, Rastogi dismissed the appeal of telecom operators saying that they can’t provide 3G services by having mere 2G license.

TDSAT has a sanctioned strength of three people including the Chairman. However, due to retirement of its technical member the tribunal now has two people, which led to the split verdict.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had concluded its marathon hearing on the plea in April.

Agencies