End of inter-circle roaming: Good or Bad move?

My-Views

Today I read in news about Govt’s decision to finally end inter-circle roaming agreements between Airtel, Vodafone & IDEA. Well, the case is not new. It has been up with doT from over months and got highlights when CEO’s of all 3 firms wrote letter to Prime Minister of India for his intervention.  


Little background

In 3G auction held in 2010, none of the operators got pan India spectrum across 22 telecom circles. Most of them have license in around 10 circles (few in 9, few in 11 and so on) and thus no one can provide full Nationwide 3G coverage.


Why did that happened?

Well, it was already expected well before auctions as Govt. gave only 20Mhz of spectrum in 2100 band in most of circles. It was decided that each player will get just 5Mhz, which brings number of 3G operators per circle to just 4. In all circles one slot was reserved for BSNL & MTNL (infact they were allocated spectrum back in 2008) and hence in most of circles there was scope of just 3 more operators. This was a problem as we do have more then 3 mobile operators at pan India level and which are big and doing pretty good business. Airtel, Tata Teleservices, Reliance, Vodafone, IDEA, Aircel, and few other small operators. Hence it resulted in cases like Airtel getting spectrum in Delhi, while IDEA missing in Delhi and going in for Haryana, where we find Airtel missing. Few months back , Airtel, Vodafone and IDEA eventually got in an agreement for inter-circle roaming. It was a situation where a user say of Airtel Haryana (where Airtel has no 3G spectrum) will use IDEA’s 3G network and will have seamless experience and no roaming or any extra cost.  


Inter-circle roaming agreement: loss to Govt?

One of big controversies here is claim from Govt. that Inter-Circle roaming agreement was huge loss to Govt as operators who have not paid for a specific circle are offering service in that circle. Thus Airtel giving 3G in Haryana is like Rs 300 crore ($60million) loss to Govt. and same applied on IDEA giving 3G in Delhi - loss of $600million to Govt. Is that true? Well, I am not a lawyer, nor I have read 3G agreement carefully from legal eyes to find if such sharing is permitted or not but from common technical sense I can say that’s just a bad judgement from Govt’s end.  


Why bad judgement…

  • Less spectrum was auctioned initially (that too after years of delay) and operators had no choice but to go for just few circles. (mistake from Govt. end)
  • Broadband still suffers badly in India due to very poor policies of Govt. ranging from very poor management of BSNL to poor niXi tariff policies. We stand no where in top 50 list in terms of broadband speed and penetration.
  • Since operators had limited spectrum, capacity is always limited.  Thus if Airtel is sharing 5Mhz with IDEA, it is still 5Mhz in total. Hence Airtel is probably not making an undue gain from the deal. Airtel has not paid to Govt. for Haryana circle but in a sense paying to IDEA for the same. They are not getting things for free!
  • All operators all already feeling hard on cash and another auction doesn’t makes sense + they are still investing a lot in building new network which is used by just a few users. Such sharing would have boosted up  usage significantly.

Well, based on above points, I don’t see any sense in not permitting such agreement. If it was illegal, then may be a policy should have been re-considered rather then causing another road block for broadband in India. What else Govt. of India expects from telecom players after getting $15billion in 3G auction that too just for 5Mhz block. It is again one of decisions where I see Govt. to be less responsive towards pain of poor broadband in India and more concerned about making money from telcos which in-turn is passed on to end users of India. With hope that India will have better broadband soon, Good Night! :)