India, on Tuesday, moved closer to an integrated 3G service regime with the telecom tribunal allowing companies to offer 3G services across the country even if they did not have pan-India spectrum.
The TDSAT, in an order issued on Tuesday, held that it was in the national interest to allow the companies a better utilisation of scarce radio frequency and slammed the government objections as misconceived. “The Government of India cannot be seen playing games in a matter of national importance such as allocation of spectrums,” it observed. The two-judge bench of Justices Aftab Alam and Kuldip Singh also held that permitting telecom service operators to ride on each other’s spectrum will not cause loss of revenue to the government.
Instead it is “crucial to the promotion and growth of communication in the country”. Explaining the rationale, the tribunal held that agreements between the operators would result in better utilisation of spectrum and would also increase revenue share for all. “The arrangement is thus beneficial to the consumer — the ordinary man, the operators and the State,” it said.
Leading service providers like Airtel, Vodafone and Idea have particular reasons to cheer the order as it quashes a penalty of Rs 1,200 crore levied by the department of telecommunications on them for entering into pacts with each other to offer 3G services in circles where they had not won spectrum in the 2010 auction. The order points out that other telecom service companies, including Reliance Communications and public sector BSNL and MTNL, too, “can enter into similar arrangements with other operators”.
While the telecom department had levied the charge saying the practice had undercut the rationale of the spectrum pricing the operators had challenged the order at the appellate tribunal. The dispute arose as in the 2010 spectrum auction no company had won airwaves in every telecom circle because of the limited amount of spectrum and consequent high prices for 3G services. They entered into agreements to offer the service using excess 2G spectrum held by each other in different circles.
The bench noted it was also setting aside the penalties imposed through the department order of March and April 2012 as well as the notices issued earlier against Aircel and Tata Teleservices for planning to offer the services in 2011.
The government may challenge the order before the Supreme Court, but a final decision will be taken after a new Cabinet is sworn in. However, sector regulator Trai, under current chairman Rahul Khullar, has supported freeing up this facility for all companies.
Jaideep Ghosh, partner, KPMG said, “The order has brought clarity on an issue that was hanging fire for three years. For companies, which do not have 3G spectrum in a circle, can now get an access to additional subscriber base which was not possible till now.” 3G service deployment in India has lagged even neighbours like Bangladesh.
Just ahead of the order, on Monday, Reliance Communications said it had signed an MoU to share roaming facilities with some companies. This, experts said, can now be extended to share intra-circle roaming facilities too.