TRAI Issues Notice To Vodafone, Airtel For 3G Sharing; Is The Government Right In Doing So?

Stuck in a city where your Telecom Provider has no 3G License? Using MNP and porting to a network which does own a license may now be your only option. For instance, Tata Docomo users in Mumbai are unlikely to every get 3G through bilateral sharing of 3G Spectrum between providers.

Yesterday, the TRAI (Telecom Regulatory Authority of India) issued notices to Vodafone and Bharti Airtel. The reason for issuing a notice was that they were providing 3G Services to their customers in states where they did not own their own spectrum for offering 3G services.

According to the TRAI, when a telecom operator won a license for 3G services in a state, they are allowed to offer 3G services there. It is an independent license. This means that they cannot offer 3G services in a state where they have no spectrum, no matter what. Bilateral Sharing of 3G Spectrum will not be allowed.

The Vigilance or TERM Cell of the  Department of Telecommunications informed them that 3 operators are already doing so.

“This will cause considerable monetary loss the Government, said one official. “If the three operators become pan-India 3G players through roaming agreements, the government will lose about Rs32,000 crore that it would have got as spectrum price. Moreover, if this is permitted, it will encourage formation of cartel in bidding for all future auction of spectrum,” 

However, the 3 operators in question: Vodafone, Bharti Airtel and Idea Cellular do not seem to agree with the TRAI.

Spokesmen of Bharti Airtel and Idea Cellular insisted that they were in fact following the license terms and conditions and it was all as per the agreement.

We think the Government is getting a bit too greedy and only thinking of their pockets. The 3G Spectrum was already sold at a ridiculously high rate, with 1000′s of Crores of Rupees entering the Government’s pockets. By not allowing operators to share spectrum, the only real loser is the average consumer. They are deprived of using 3G services and are forced to switch providers.

What do you think? Is the Government right in doing so or are they just aiming for more revenue?

5 Responses to “TRAI Issues Notice To Vodafone, Airtel For 3G Sharing; Is The Government Right In Doing So?”

  1. Dhanush
    September 28, 2011 at 8:21 pm #

    The Government is right in doing, As for one state all operators can buy 3G spectrum and government will share frequency for them at the time of bid. And bid is not for single operator who quote maximum amount.

    If operator “A” gain licence with 100 crore and he sell his spectrum with other 5 operators @ 50 crore, then why government sell spectrum to operators ? ,

    See BSNL paid 18,500 crore for spectrum fee, Aircel paid 6,499 crore
    Airtel paid 12,295 crore Idea paid 5,768 crore Reliance paid 8,585 crore

    Tata paid 5,864 crore Vodafone paid 11,617crore

    If they share this network, government will lose Rs32,000 crore or more .

  2. Dilip
    September 28, 2011 at 11:38 pm #

    The government is right because if the spectrum is allowed to share, then these opera/tors will game spectrum auctioning with an understanding not to compete with each other in each region’s spectrum bidding. This is problem of oligopoly.

    For instance if it wasn’t for exclusivity, vodafone, airtel and tata can stay out of competition for bidding and then share specturm which is total loss of money to the Government.

    By allowing not to share spectrum, Government forced these operators to compete with each other for spectrum with highest bidding.

    Rest aside political opinions, Government is made by public and for the public, so any money going to government is not greedy at all and could be useful many developments.
    Corporates are greedy and its their duty to be greedy and profit motivated.

    Last not least, while 1000′s of crores may seem huge sum to us public but to business houses it may not be. Who knows perhaps they might already been in agreement to bid less with thinking that it could be shared later.

  3. Jeet
    September 28, 2011 at 11:45 pm #

    Am I reading this right? Government is effectively saying allowing telecom ‘roaming’ also caused similar losses to them and they should have stopped the service.

    What’s the difference between basic ‘calling’ services and 3G data services from an average consumer’s point of view?

    Government only has a rather ‘tiny’ point in this case.

  4. September 29, 2011 at 1:10 pm #

    I think the issue has been misunderstood. The real issue is not of roaming arrangement for circles where operator ‘A’ does not have spectrum and wants to provide roaming to customers visiting that circle. Rather the issue is of sharing spectrum in any given circle.

    Therefore the government has rightly sent the notice to the operators. Rather I am astonished why government took so long in detecting this. Operators too have behaved immaturely, thinking that no one will be understand this. Now they will have to bear the burnt for sure.

  5. September 30, 2011 at 9:36 pm #

    govt is right in doing it.

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