NEW DELHI: The telecom department will ask Bharti Airtel, India's largest mobile phone company, to stop providing third generation (3G) services 'within fifteen days' in seven circles where it does not have frequencies to provide high-end data services, an official aware of the development told ET. The company will also be asked to pay a penalty of 350 crore, or 50 crore in each of the seven regions where it provides 3G services through roaming pacts with its rival operators - Vodafone and Idea Cellular.
It is learnt that the telecom department (DoT) is preparing similar notices for Vodafone and Idea Cellular.
But, in the case of Bharti Airtel, telecom minister Kapil Sibal has already approved the DoT's move to slap a 350-crore penalty on the telco and will also ask the company to stop offering 3G services outside its licensed zones through roaming pacts.
This will be the second notice to Bharti on this issue in recent months. In September 2012, the DoT had asked the company to terminate 3G roaming pacts, that enabled it to sign up high-end data customers across the country even in areas where they did not have third-generation spectrum, and submit compliance reports within three days. Bharti had obtained a stay on the DoT order in the Delhi High Court.
In the 2010 auction of 3G airwaves, which brought in higher-than-expected bids, Bharti, Vodafone and Idea had won licences for 13, 9 and 11 circles, respectively. The three incumbent GSM operators then entered into 3G roaming pacts with each other that enabled them to use each other's airwaves and offer 3G services, such as video-calling and high-speed internet on phones seamlessly across the country. The government first issued notices to Bharti, Vodafone and Idea asking them to stop offering third-generation voice and data services outside their licensed zones in December 2011, which resulted in these companies approaching the telecom tribunal, and the two-member bench of the tribunal gave a split verdict in July 2011.
Telecom minister Kapil Sibal told ET that the split verdict from the tribunal could not be interpreted as a victory for operators. He also dismissed telcos' claims that the DoT, prior to the 3G auctions, had clearly specified that 'roaming policy is applicable to licences and not specific to spectrum bands'. Mobile phone companies argue that when they had sought clarifications regarding the auctions in 2010, the DoT in its response had said that 'roaming will be permitted'.
"For anyone to say they were orally assured, that in itself is suspect. If mature operators have bid for 3G spectrum on such assurances, then they should not be in business. I have seen the replies to queries where operators say we allowed them to offer this facility - you can interpret those replies in any way you want to. How will an entity be allowed to operate in an area in which it doesn't have a licence and even acquire customers from there? Whether it is right or wrong, it is not government against operator - it's what we believe our decision meant," Sibal said.
The minister further added that he had told operators several months ago to terminate the roaming pacts they had entered into with each other. "If with open eyes, you are doing something that is not government approved, something that we have not permitted you to do, then you cannot seek relief," Sibal said.
On similar lines, the DoT's communication that will be sent to Bharti Airtel, will state that replies to queries prior to the auctions, does not 'create any new rights to the parties'.
"It has also been made clear that the documents is for information purpose only and has no binding force. 3G is a standalone service and not an extension of or in continuation of 2G spectrum, is clear from the Notice Inviting Applications conditions," states the draft DoT communication to Bharti, a copy of which was seen by ET.
The Bharti spokesperson did not comment on the DoT's plan.
Airtel may stop 3G services in 7 regions by month-end - The Times of India
It is learnt that the telecom department (DoT) is preparing similar notices for Vodafone and Idea Cellular.
But, in the case of Bharti Airtel, telecom minister Kapil Sibal has already approved the DoT's move to slap a 350-crore penalty on the telco and will also ask the company to stop offering 3G services outside its licensed zones through roaming pacts.
This will be the second notice to Bharti on this issue in recent months. In September 2012, the DoT had asked the company to terminate 3G roaming pacts, that enabled it to sign up high-end data customers across the country even in areas where they did not have third-generation spectrum, and submit compliance reports within three days. Bharti had obtained a stay on the DoT order in the Delhi High Court.
In the 2010 auction of 3G airwaves, which brought in higher-than-expected bids, Bharti, Vodafone and Idea had won licences for 13, 9 and 11 circles, respectively. The three incumbent GSM operators then entered into 3G roaming pacts with each other that enabled them to use each other's airwaves and offer 3G services, such as video-calling and high-speed internet on phones seamlessly across the country. The government first issued notices to Bharti, Vodafone and Idea asking them to stop offering third-generation voice and data services outside their licensed zones in December 2011, which resulted in these companies approaching the telecom tribunal, and the two-member bench of the tribunal gave a split verdict in July 2011.
Telecom minister Kapil Sibal told ET that the split verdict from the tribunal could not be interpreted as a victory for operators. He also dismissed telcos' claims that the DoT, prior to the 3G auctions, had clearly specified that 'roaming policy is applicable to licences and not specific to spectrum bands'. Mobile phone companies argue that when they had sought clarifications regarding the auctions in 2010, the DoT in its response had said that 'roaming will be permitted'.
"For anyone to say they were orally assured, that in itself is suspect. If mature operators have bid for 3G spectrum on such assurances, then they should not be in business. I have seen the replies to queries where operators say we allowed them to offer this facility - you can interpret those replies in any way you want to. How will an entity be allowed to operate in an area in which it doesn't have a licence and even acquire customers from there? Whether it is right or wrong, it is not government against operator - it's what we believe our decision meant," Sibal said.
The minister further added that he had told operators several months ago to terminate the roaming pacts they had entered into with each other. "If with open eyes, you are doing something that is not government approved, something that we have not permitted you to do, then you cannot seek relief," Sibal said.
On similar lines, the DoT's communication that will be sent to Bharti Airtel, will state that replies to queries prior to the auctions, does not 'create any new rights to the parties'.
"It has also been made clear that the documents is for information purpose only and has no binding force. 3G is a standalone service and not an extension of or in continuation of 2G spectrum, is clear from the Notice Inviting Applications conditions," states the draft DoT communication to Bharti, a copy of which was seen by ET.
The Bharti spokesperson did not comment on the DoT's plan.
Airtel may stop 3G services in 7 regions by month-end - The Times of India