Big players offering service in areas they did not bid for during auction.
Even as the aftershocks of the 2G spectrum scam reverberate through the corridors of government and corporate India, a fresh controversy has erupted, this one related to 3G spectrum allocation, with huge fiscal and legal ramifications that the UPA government can do without at this critical juncture.
Roaming arrangements were to provide seamless connectivity for cell phone subscribers as they travelled from one telecom circle to another on a temporary basis. However, a few telecom companies appear to be exploiting this to provide full-time service, causing a loss to the public exchequer as well as upsetting the level playing field for rolling out 3G services.
Documents available with DNA show that the Telecom Regulatory Authority of India (Trai), has taken cognisance of the issue. Trai has shot off a letter to R Chandrashekhar, secretary, department of telecom, warning him on the issue. In a letter dated October 20, 2011, (No. 102-11/2011-MN), Trai has highlighted that some private telecom operators have begun to offer 3G services in areas which “has not been allocated to them”. This means, these telecom operators are now offering services and earning money from areas for which they never bid during the 3G auctions and, therefore, never paid any licence fee.
So far, the government-owned telecom players MTNL and BSNL are the only companies which paid money for an all-India licence for offering 3G services — a whopping Rs17,000 crore that gave them the right to do so.
Other players - Bharti Airtel, Idea, Vodaphone, Reliance Telecom, Tata Teleservices, Aircel etc - bid for selective circles and paid for only those areas where they bid the highest.
But soon after the bidding was over and the companies began to roll out 3G services, they began to arrive at private agreements that would allow them to start selling services in areas where they had lost out on the bidding. Trai says that “it has come to the notice of (the) authority that some service providers viz. M/s Bharti Airtel, Idea Cellular Limited and Aircel Limited are offering 3G services even in those service areas where 3G spectrum has not been allocated to them.”
Trai feels that these service providers are offering these services “using intra-service area roaming arrangement”. Trai’s analysis has “prima facie come to a conclusion that such an arrangement is a prima facie, violation of the terms and conditions of the license”. On “economic grounds”, Trai has stated in its eight-page letter that it is of the “opinion that such arrangements, if permitted, can lead to a situation where operators, after entering into commercial agreements for use/leasing of spectrum, will launch any type of service on intra-circle roaming, without having the commercial rights to use the spectrum in that particular service area”.
Trai has also raised concerns on “technical grounds” stating that with limited spectrum available, “the quality of service will be severely jeopardised when the number of subscribers increase in the long run”. Worse, if there is a dispute between two telecom companies with such agreements in the future, then subscribers would get disconnected.
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