Mobile Phone Operators asked to Scrap Illegal Mutual Roaming Agreements

India's telecom ministry on 22 December 2011 informed mobile phone operators that they must scrap illegal mutual roaming agreements that allow them to provide seamless nationwide 3G services. As per the ministry, the pacts that let the operators offer 3G services outside their licensed zones are in violation of terms and conditions of their licences.

The government complained that telecom operators wereusing the 3G roaming deals to offer services in areas where they have not paid for the spectrum.

Leading mobile operators such as Bharti Airtel, Vodafone and Idea Cellular had struck deals with each other to offer ultra-fast 3G services in areas where they did not acquire spectrum in a costly bandwidth auction in 2010. The firms entered into the deals because none could afford nationwide 3G spectrum in the high-priced sale.

Bharti has 3G bandwidth in 13 of India's 22 telecom zones while Idea has access in 11 areas and Vodafone's India unit in nine.

The announcement by the ministry dealt a a blow to the companies, which had hoped to recover their 3G auction payments by providing high-premium 3G data services across the country in India's fiercely competitive telecom market.

Earlier operators had noted that in case they could not offer nationwide roaming, the government should refund the sums paid for 3G spectrum or restage the auction as it would alter the basis on which 3G bids were made.

Third-generation services, or 3G, allow mobile phone users to surf the Internet, video conference and download music, video and other content at a much faster pace than the current second-generation service offered in India.
The government had reaped $15 billion from auctioning the 3G licences in 2010. Bharti and Idea paid 123 billion rupees ($2.3 billion) for licences while Vodafone paid 116 billion rupees.

Indian telecom companies which currently generate only small revenues from data services expect the market to grow exponentially as less than 10 percent of the 1.2 billion population has access to Internet at the moment.
India has some 881.4 million mobile and 33.2 million fixed-line subscribers with total teledensity at 76, up from 2.5 in 2000.