Curious Case of 3G Roaming

Abstract

In 2011, Trai dealt with a case of ‘intra-circle roaming’ in 3G. Telecom companies that had recently bought, through auction, 3G spectrum in one circle but not in another, agreed to swap their spectrum on a mutual basis. This would mean a mutuallybeneficial 3G business. BSNL did not like this idea, as it feared its falling market share would further be eroded by this private sector ‘collusion’. So, it complained to the department about illegal provisioning of 3G service by competitors. There was also another PIL on the same issue.

Trai held that 3G roaming was illegal and even the department of telecommunications (DOT), reversing its earlier clarification to industry, agreed with Trai and issued showcause notice to the erring firms. After failing to sort out the matter with the minister, the firms appealed to Tdsat,thetelecomdisputes Settlement Appellate Tribunal. Curiously, DOT is on the offensive vis-à-vis the industry, maintaining their mutual agreement is illegal, but is on the defensive with the CVC that is exploring if DOT officials had any role in facilitating the telcos’ deals.

On April 1, 2008, DOT had issued, during the 2G regime, Guidelines on infrastructuresharing, which outlined where telcos can share their active and passive infrastructure, but precluding sharing of spectrum. On June 12, 2008, DOT issued an amendment to the Universal Access Service Licence and CMTS licence, saying, “A licencee may enter into mutual commercial agreementsforintraservicearea roaming facilities with other…licencees…” By 2010, both Trai and DOT had realised the folly of bundling licence with spectrum and for 3G auctions and any future 2G auctions, licence and spectrum would be allotted separately. In February 2010, when the government was finalising the modalities and framework for auction of 3G spectrum, as part of the pre-bid conference, the industry had specifically asked DOT if intra-circle roaming would also be applicable in case some operators were not able to acquire spectrum in all circles. DOT replied, “The roaming policy is applicable to the licences and not to specific spectrum bands.” This was reiterated on a question on 3G and BWA roaming, “The provision for intra-circle roaming is as applicable to the service licence, and is not different or specific to the spectrum being currently auctioned.” After 3G auctions, those who got the spectrum ‘were allowed’ to use it by inserting a specific clause in their existing licence to that effect. After separating licence and spectrum, this was superfluous red tape. However, Trai took a different view. It opined intra-circle roaming was illegal, because: (a) Permission to use 3G was made by a specific amendment to do so only for those who were allotted 3G spectrum for that area. (By implication, others, not allotted 3G for that area, were not permitted). (b) Guidelines on infrastructuresharing do not permit sharing of allocated spectrum. (c) To reconcile why the amendment of June 12, 2008, permitting 2G roaming may be okay, but not 3G roaming, Trai said the rationale for permitting intra-service roaming was in the context of two operators whohadlicencebundledwith (2G) spectrum, and had independent rollout obligations that were not changed by intra-circle roaming. The same was not true for 3G, because those who did not have 3G, did not have roll out obligations. So, Dot’s facilitation of intracircle roaming, by implication, must pertain only to 2G. Trai also put DOT on the backfoot, by pointing out the imbroglio was a making of its own, arising out of Dot’s am- endment to UASL and CMTS licences without consulting Trai and, so, permitting operators to enter into intra-servicearearoamingagreements. Trai’s arguments have some infirmities: firstly, the permission to use 3G, after the firms bought 3G spectrum at market prices, was itself redundant, more so when licensing and spectrum were separated. If at all, licence should have been rewritten as G-agnostic. Secondly, guidelines for infrastructure sharing were writtenduringthe2gregime, when spectrum was given at throwaway prices, and a ban on spectrum-sharing may have had relevance then; but when firms bought 3G at market prices, continuation of that ban makes no sense, making the guideline anachronistic. The third argument is invalid because if someone is not obliged to add customers but actually adds, it is good and should not be prevented! Economically speaking, the telcos have bought 3G at market prices, and how they use it isn’t the business of either Trai or DOT. Branding this illegalthrowsusbacktothelicence-raj days when those who produced more than their licence permitted were punished, not applauded. Not that Trai and DOT are unaware of this. The suffocating atmosphere of corruption-mongering, with the CVC being unleashed on DOT officials, makes everyone wants to play safe, and banning is a safe strategy for the regulator and government,evenif itisawrongone.