Implications of Canceling Wireless 3G Intra Circle Roaming Agreements

By:
On:
In: Mobile, Telecom

3G Service providers are struggling to survive with poor take-off and adding to their woes is Headless Government’s stand to cancel Roaming arrangements.

From media reports and letters from CEOs of Telcos to the Government gives us a sense that Government is determined to cancel 3G ICR arrangements. What does this mean for the Telecom Sector in India ?

  • For Consumers – If 3G Roaming is scrapped, 3G tariffs may rise over time owing to lower competitive intensity (in this sense, the roaming agreements are definitely pro-consumer). [Already in our 3G Poll, 67% of Subscribers are complaining of High 3G Tariffs for not subscribing to the same]
  • If 3G roaming is scrapped, then we believe some churn will happen as non-3G telcos in any circle will try to gain 2G subscribers to replace the revenue lost owing to the 3G subscriber churn.
  • Again churn will happen where Telcos may lose pure 2G subscribers in circles without 3G spectrum, they will also gain in circles with 3G Spectrum.
  • TRAI mentions that some telcos are paying 2G spectrum charges in their non-3G circles. Telcos have added 3G subscribers/ provided 3G services without paying the 1% additional spectrum charges on 3G spectrum. [Telcos must Pay the difference, this is point of contention]
  • Theoretically Reliance Communications would benefit from cancellation of 3G ICRs. It is the only major telco other than BSNL/MTNL that has a pan-India 3G spectrum and has not entered into 3G roaming agreements. [IMO, RCom’s lethargic Management may not be able to cash in on the opportunity]

Hopefully, the government will resolve the issue inviting all stake holders for the talks. Don’t Forget Subscriber / Consumer as stake holder 🙂

Related Articles:

1 Comment

  1. Operators now have the choice of appealing against DOT’s order in the TDSAT and subsequently the Supreme Court. Implementation of the order would have to be immediate, unless the operators get a stay order from the TDSAT.

    If Operators don’t appeal against the Order, then it is fair to assume Kapil Sibal has got all the stakeholders across the table and has already resolved the issue by asking Telcos to keep quiet for few days until the scam ridden government cleans up and the Govt / DoT will not impose any penalty for 3G roaming issue.

    Later in the NTP 2011, Govt will make Spectrum sharing legal, this way their will be one less scandal for the Govt.

    Telcos move will tell everything 🙂

Comments are closed.