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Expectedly Big 3 of GSM opt for 3G strategic intra-circle roaming alliance

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Stop 3G services on roaming: DoT to Idea, Vodafone

NEW DELHI: The telecom department (DoT) on Friday asked Vodafone and Idea to stop offering third-generation (3G) voice and data services outside their licensed zones through roaming pacts.
The notices, issued late Friday night, states these companies must also pay a penalty of Rs 50 crore in every circle where they were offering high-end data services on 3G networks through roaming pacts. This implies that Vodafone and Idea face the prospect of being slapped with penalties to the tune Rs 450 crore and Rs 550 crore, respectively, for this alleged violation.
Tata TeleservicesBSE -2.88 % and Aircel had also forged a similar 3G roaming agreement, but called off the alliance after DoT began investigating these arrangements in late 2011. But the DoT slapped notices on these two companies too on Friday for violating licence norms by entering into such pacts, executives with mobile phone companies confirmed.
Bharti, Vodafone and Idea had won 3G airwaves in 13, nine and 11 circles, respectively, in the 2010 auctions and their intra-circle roaming pacts ensured that customers could access high-speed data services on a pan-India basis. India is divided into 22 circles. All mobile phone companies are expected to challenge the DoT's notice in court next week. The companies have 60 days to respond, and the notice adds that the Centre may cancel their 3G permits if the government is not satisfied with the replies furnished by them.
The telecom department had slapped a similar notice on Bharti AirtelBSE -3.08 % in September 2012. But in October, the Delhi High Court offered relief to Bharti Airtel and granted a stay on a government order seeking that the company stop offering 3G services via roaming agreements.
In December 2011, the telecom department asked these telcos to immediately stop offering of 3G services through roaming pacts outside the licensed zones and the government termed such agreements as 'illegal'. Mobile operators had challenged the order before the telecom tribunal, TDSAT, which in July gave a split verdict. These telcos argued that DoT had told them that intra-circle roaming would be allowed before they participated in the 3G auctions of 2010.
The DoT in its latest notice to Vodafone, Idea Cellular, Aircel and Tata Teleservices issued on Friday has said that the split opinion of the tribunal only confirms the validity of the department's letter to mobile phone companies in December 2011 directing that roaming pacts to be scrapped.
Post the tribunal's split verdict, the Additional Solicitor General of India, in his opinion had said that fresh show-cause notices could be issued for imposition of penalty, including cancellation of licence. Further, revenue generated through unfair means can be recovered through separate showcause notices, the opinion added.
Vodafone and Tata Teleservices executives confirmed their respective companies had received the show-cause notices. The Idea CellularBSE -1.47 % spokesperson could not be reached for a comment.
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