The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) overturned the 2011 ban imposed on intra-circle roaming (ICR) pacts among operators. This allows them to offer 3G services even in cities where they do not have the spectrum. This will benefit the big three — Bharti Airtel, Vodafone and Idea Cellular — who can now offer their customers seamless services in circles where they do not have licences to operate and will also boost 3G services.
These three players did not get pan-India 3G spectrum during the 2010 auction of spectrum and so entered into ICR pacts to offer 3G services in circles where they did not win 3G licences. The telecom department declared these pacts illegal and imposed a penalty of Rs1,200 crore that TDSAT has now quashed.
Whilst on the face of it this sharing of networks sounds good as it saves on costs and allows optimum use of infrastructure, it means a loss by way of licence fees to the government. Roughly, the government stands to lose around Rs20,000 crore if these three operators are permitted to enter into ICR pacts. Also, in future, an operator can buy a cheap licence, say for J&K circle, and go pan-India for a song.
TDSAT’s order is not likely to go unchallenged. The government can go to the SC and communications minister Kapil Sibal has already said that ICR pacts are specifically disallowed in the licence agreements. There has been talk of changing this licence rule without causing a loss to the government. But now it can only be done by the next government.
