Trouble could be brewing for mobile operators, including Airtel, Vodafone and Idea Cellular, with the Supreme Court seeking an explanation as to why intra-circle roaming agreements to offer 3G services should not be termed illegal.

The apex court has sent notices to the operators after the Department of Telecom filed a petition to nullify the roaming arrangement.

The three operators had inked an intra-circle roaming agreement to offer 3G services across the country, using each other’s spectrum. This was because none of these players had won pan-India spectrum individually in the auctions held in 2010.

The Department of Telecom had objected to the deal, saying that though roaming is permitted, such an intra-circle arrangement cannot be used to sell 3G connections in areas where operators do not have spectrum. The DoT had asked the operators to stop such services and had also imposed penalties.

The Telecom Disputes Settlement Appellate Tribunal (TDSAT) had, however, quashed the penalties and ruled in favour of the operators. “Allowing intra-circle 3G roaming would result in a much fuller and better utilisation of 3G spectrum. This would increase the gross revenue of both the provider and the seeker of the 3G network, and the Government, having a percentage share in the adjusted gross revenue of the licence holders, would thus be able to get a larger sum as licence fee. The arrangement is thus beneficial to the consumer, the operators and the State,” the tribunal had said.

However, if the Supreme Court reverses the tribunal order then it will be a big blow to the telecom companies. In such a scenario, the next round of spectrum auctions could get intense as the operators may try to acquire airwaves for a pan-India footprint.

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