Telcos will use each other's networks via intra-circle roaming agreements
In an undeclared roll-out of inter-dependency in the highly competitive telecom market, three major telecom players – Vodafone, Idea Cellular and Bharti Airtel – have entered into agreements to provide pan-India 3G services.
The three will now use each other's networks through intra-circle roaming arrangements where they do not have licences.
Airtel, Aircel and Reliance Communications each own 3G spectrum licence in 13 of the 22 telecom circles, while Vodafone, Idea and the Tatas each have licence in nine circles.
Except for Vodafone, two others, however, are unwilling to officially confirm the arrangements. In an e-mailed response to Business Line, Vodafone said that it “has entered into a bilateral roaming agreement with Idea and Airtel in circles where we have not built our own 3G network”.
The communication further explained: “With this agreement, Vodafone / Airtel / Idea will bring a pan-India experience of 3G services to their customers.”
While Aditya Birla-controlled Idea has entered into an intra-circle roaming arrangement with Vodafone for introducing 3G services in Delhi and Kolkata circles, Bharti Airtel will partner Idea in providing 3G services in Karnataka – primarily in Bangalore and Mysore. 3G services in these circles were launched earlier this month.
Vodafone, meanwhile, has started 3G services in Andhra Pradesh and Kerala through an agreement with Idea. Uttar Pradesh (West) is another circle where the company plans to introduce similar services through Bharti Airtel's network.
Similarly, Bharti Airtel has entered into intra-circle roaming agreements to share Idea's 3G network in Gujarat. Airtel launched 3G services in Gujarat since the midnight of June 29.
Ms Shaily Shah, IT analyst at Gartner, said: “more such tie-ups amongst operators are in pipeline in the coming days” since no Indian telecom operator has obtained pan-India 3G spectrum licences.
Although operators admit entering into agreements, they remain tight-lipped when it comes to sharing details, especially about commitment clauses regarding reserving a specific portion of spectrum. Moreover, pricing issues too remain undisclosed.
Industry sources point out that under no circumstances can there be a pricing flexibility in these arrangements. An operator in intra-circle roaming arrangements will always be dependent on the host operator's pricing strategy. There has to be parity in rates between the two companies.
Queries sent to Idea and Vodafone elicited no response on issues relating to commitments with host network and pricing strategy.
“Since each operator is dependent on another for network sharing, there is bound to be homogeneity in the market,” Ms Shah said.
The intra-circle arrangement networks have been kept low-key. While companies say that they these launches are done “locally in the respective circles,” industry sources differ.
“This sort of arrangement is relatively new in the Indian market. Perhaps operators want to be sure on the outcome before highlighting them,” Ms Shah said.