Bharti Airtel’s 3G roaming pacts caused Rs.200 crore loss: CAG
Issue refers to deals signed by Airtel with two other telcos that allowed all three to offer 3G services across the country
Bharti Airtel signed 3G roaming deals with two other telcos, Vodafone and Idea Cellular, that allowed all three to offer 3G services across the country. Photo: Mint
Updated: Fri, Sep 27 2013. 12 40 AM IST
New Delhi: The government’s auditor has said in a report that India’s largest telco Bhari Airtel Ltd caused a loss of more than Rs.200 crore to the national exchequer because of the controversial 3G intra-circle roaming arrangements the company signed with Vodafone India Ltd and Idea Cellular Ltd.
The draft audit report by the Comptroller and Auditor General (CAG), titled Unauthorised
use of 3G spectrum in seven circles by Bharti Airtel Ltd without
winning the bids in the auction and thereby short collection of spectrum
usage charge (SUC) amounting to Rs204.35 crore by DoT, dated 13 September, was sent to the department of telecommunications (DoT) for a reply within 15 days.
The issue refers to 3G intra-circle roaming agreements signed by Bharti Airtel with the other two telcos that allowed all three to offer 3G services across the country.
Bharti won spectrum to offer 3G services in 13 circles
(India is broken up into 22 circles for the purposes of spectrum
allocation), Idea Cellular in 11, and Vodafone nine.
Last month, the auditor sent a similar draft report on Vodafone India causing a loss of Rs.187 crore.
The report on Idea has not been sent.
A spokesperson for Bharti declined comment. Last month, a spokesperson for Vodafone had also declined to comment
The 3G roaming agreements were signed in July 2011.
DoT and the telecom regulator have found the agreements illegal as they amount to spectrum sharing, which is currently not allowed. DoT subsequently sent penal notices to all three telcos for an amount of Rs.50 crore for every circle where they gave spectrum and another Rs.50 crore every circle where they used another telco’s 3G spectrum.
DoT and the telecom regulator have found the agreements illegal as they amount to spectrum sharing, which is currently not allowed. DoT subsequently sent penal notices to all three telcos for an amount of Rs.50 crore for every circle where they gave spectrum and another Rs.50 crore every circle where they used another telco’s 3G spectrum.
The telcos are currently fighting the penalty notices in
the courts. Several experts have also questioned DoT’s policy that
allows fibre and tower sharing, but prohibits spectrum sharing.
On Monday, the Supreme Court asked Bharti Airtel to go
back to the Telecom Disputes Settlement and Appelate Tribunal on a
petition challenging the Delhi high court’s earlier decision to bar the
operators from offering 3G services in circles where they haven’t won
spectrum.
The apex court had earlier barred the operators from
signing on new 3G customers in these circles, but allowed them to
service existing customers.
The CAG’s calculations are based on the higher spectrum
user charge telcos that won 3G spectrum were to pay. It has argued that
those telcos that used the intra-circle roaming agreements offered these
services without paying this charge, thereby causing a loss to the
government.
Bharti paid Rs.12,295.46
crore for spectrum in thirteen circles including Andhra Pradesh, Assam,
Bihar, Delhi, Himachal Pradesh, Jammu and Kashmir, Karnataka, Mumbai,
the NorthEast, Rajasthan, Tamil Nadu, western Uttar Pradesh and West
Bengal.
The auditor has suggested that the telcos should pay a
proportionate amount of the bid amount for the circles where they
offered the contentious services without buying spectrum.
In Bharti’s case, the CAG has calculated that this amount comes to around Rs.521.33 crore, taking into account 31 months of use.
Vodafone paid Rs.11,617 crore for 3G spectrum in nine service areas.
pgdm 1st year
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