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India: 3G roaming telco pact illegal

Government says 3G roaming agreement signed between operators illegal but operators fight back, demanding refund, say reports.
Written by Liau Yun Qing, Contributor on

The India government says 3G roaming agreements signed between carriers are illegal and must be "stopped immediately", but the local operators are fighting back by demanding the amount they paid for spectrum payment be refunded if such restrictions are allowed to proceed.

A report Thursday by the Wall Street Journal (WSJ) said India's telecommunications department determined that 3G roaming pacts inked among various telecos were illegal and must be terminated immediately.

The government agency, however, had not decided if it would issue show-cause notices or fine operators that had signed 3G roaming agreements, the country's telecom secretary R. Chandrashekhar said in the report.

Local English daily The Hindu reported that three operators--Bharti Airtel, Vodafone Essar and Idea Cellular--had written to the prime minister to demand a refund of their spectrum auction payment if such regulation were to proceed.

In May 2010, the Indian government raised INR 677.2 billion (US$14.6 billion) from the auction. However, there were no buyers for the pan-India 3G license as the bidding price for this was pegged at INR 168.28 billion (US$3.6 billion), which Bharti, India's largest wireless operator, said was "beyond reasonable levels".

The Hindu noted that the three operators took matters into their own hands and signed 3G roaming agreements to provide wider coverage. Tata Teleservices and Aircel had followed suit with their own agreement but this was terminated later, said the report.

The Department of Telecommunications said it looked into the matter and took legal opinion after receiving complaints. It then issued notices to the companies to end their contracts immediately or face legal action, reported The Hindu.

A previous ZDNet Asia report noted that while India had rolled out 3G services, adoption rate had been slow with some users complaining about slow speeds and bad connections.

In a separate report, industry watchers also noted that collaboration between operators would be critical to ensure customers received seamless connectivity across all circles in India. Naveen Mishra, a former lead telecoms analyst at IDC India, said then that interconnection agreements would become a market necessity for the operators. Mishra is currently an analyst with CyberMedia Research.

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