Given how telecom firms invested R68,000 crore in bidding for 3G licences, and another R15,000-20,000 crore each in rolling out networks, it was never clear why the government, in 2011, decided to go after them and levy penalties for entering into
intra-circle roaming agreements with one another—while a penalty of R350 crore was imposed on Bharti Airtel, it was R550 crore for Vodafone and R300 crore for Idea. There were, as this paper had pointed out three years ago, several reasons for why this was wrong, some practical and some legal. For one, since the government didn’t have enough spectrum to issue more licences, no firm had spectrum across the country. Since the only way to ensure all Indians got access to 3G broadband services was to allow intra-circle roaming, it made practical sense to allow this—more so, since the government’s own targets for broadband penetration critically depended upon the spread of mobile services like 3G. As for the argument that allowing roaming deprived the government of revenues, this was disingenuous. For one, with more than enough takers for whatever 3G spectrum has been put on auction, there has been no loss of interest due to roaming—the argument made was that, with intra-circle roaming, telcos would no longer bid fat entry fees for 3G services. As for annual revenues the government got from 3G services, since the revenues of the firm doing the roaming get added to the original licencee’s revenues, there can be no loss.
There were also very good legal reasons for allowing roaming. First, there is no such thing as a 2G or a 3G licence—as the TDSAT has ruled, these are simply spectrum bands, the operative license is the UASL one. Since the government had, on June 12, 2008, amended the UASL licence to allow intra-circle roaming, it was always clear that such roaming would be allowed for those with 3G spectrum as well. To be on the safe side, however, telcos asked the government about this in various open houses prior to the 2010 auctions. In question after question, the government’s reply was the same: intra-circle roaming is covered under the UASL licences so, yes, it will be permitted for 3G spectrum. As part of the auction process, all questions asked during the open houses and the government’s replies to these were given to bidders along with the bidding document—in other words, the government’s assurances were