India says 3G roaming mobile pacts 'illegal'

Dec 22, 2011
An Indian officegoer checks a text message on his mobile phone in Mumbai in September. India's telecom ministry told mobile phone operators on Thursday that they must scrap "illegal" mutual roaming agreements allowing them to provide seamless nationwide 3G services.

India's telecom ministry told mobile phone operators on Thursday that they must scrap "illegal" mutual roaming agreements allowing them to provide seamless nationwide 3G services.

The pacts that let the operators offer outside their licensed zones are "in violation of terms and conditions of their licences," the top bureaucrat in the telecom ministry said.

"These () services are illegal," Telecom Secretary R. Chandrashekhar said.

Leading such as Bharti Airtel, Vodafone and Idea Cellular struck deals with each other to offer ultra-fast 3G services in areas where they did not acquire spectrum in a costly bandwidth auction last year.

The firms entered into the deals because none could afford nationwide 3G spectrum in the high-priced sale.

Bharti has 3G bandwidth in 13 of India's 22 telecom zones while Idea has access in 11 areas and Vodafone's India unit in nine.

The announcement deals a blow to the companies, which had hoped to recover their payments by providing high-premium 3G data services across the country in India's fiercely competitive telecom market.

There was no immediate reaction from telecom operators but analysts have said the dispute is bound to end up in the courts.

An Indian man talks into his mobile phone as he walks past a digital board broadcasting share prices outside a building in Mumbai in July. Shares of Bharti Airtel, India's largest mobile operator by subscribers, fell by nearly two percent Thursday to 335.45 rupees, bucking an overall firmer market, while Idea Cellular's shares dropped by 1.2 percent to 81.70 rupees.

Earlier operators said if they could not offer nationwide roaming, the government should refund the sums paid for 3G spectrum or restage the auction as it would "fundamentally alter" the basis on which 3G bids were made.

The government says are using the 3G roaming deals to offer services in areas where they have not paid for the spectrum.

Third-generation services, or 3G, allow to surf the Internet, video conference and download music, video and other content at a much faster pace than the current second-generation service offered in India.

Other service providers like Tata Teleservices and Aircel also struck roaming deals but scrapped them after it became clear the ministry would object.

The government reaped $15 billion from auctioning the 3G licences last year. Bharti and Idea paid 123 billion rupees ($2.3 billion) for licences while Vodafone paid 116 billion rupees.

Indian telecom companies currently generate only small revenues from data services but they expect the market to grow exponentially as less than 10 percent of the 1.2 billion population has access to Internet at the moment.

Shares of Bharti Airtel, India's largest mobile operator by subscribers, fell by nearly two percent Thursday to 335.45 rupees, bucking an overall firmer market, while Idea Cellular's shares dropped by 1.2 percent to 81.70 rupees.

India has some 881.4 million mobile and 33.2 million fixed-line subscribers with total teledensity -- the number of telephones per 100 people -- standing at 76, latest government data shows, up from 2.5 in 2000.

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User comments : 1

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that_guy
not rated yet Dec 22, 2011
So, let me get this straight:

In india, they want to remove the service sharing so that instead of a healthy cooperative/competitive environment, you only have one or two really large operators that fully cover most of india.

Imagine traveling and not being able to use your phone as soon as you leave your state.

We have the big four in America, but we also have spectrum lessees and regional players because we allow roaming agreements. Imagine if your two options were only Verizon and AT&T with no competition prepaid or otherwise.

I swear, they must spice their food up with lead paint chips in india. Their politicians are straight up high.

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