India's top telcos threaten to hang up on 3G

Dylan Bushell-Embling
23 Nov 2011

Three of India's largest mobile operators have called on the government to refund their 3G license payments if domestic 3G roaming pacts are declared illegal.

Bharti Airtel, Vodafone Essar and Idea Cellular have warned they will seek a return of their spectrum auction payments, coupled with compensation for the network investments made so far, if not allowed to extend their 3G service coverage through a mutual roaming pact.

The CEOs of the operators made the statement in a letter sent to prime minister Manmohan Singh, and seen by India's Economic Times.

The operators argue that they bid on spectrum in last year's $15 billion 3G auction – even though spectrum scarcity guaranteed no company would win pan-India spectrum - on the understanding that they would be allowed to enter domestic 3G roaming deals.

They say they were reassured by the telecom ministry in Q&A's prior to the auction, and that changing the rules would be tantamount to reneging on the promise.

Bharti, Vodafone and Idea entered a high-profile roaming agreement in July, which could eventually allow them to offer 3G services nationwide.

But the government has been threatening to block the planned 3G roaming deal and others like it, on the basis that it could be considered a form of spectrum sharing, which is prohibited by the license terms.

But the operators argue in the letter that because the deal only allows them to offer 3G services to roaming customers, it does not constitute spectrum sharing.

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