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IN THE HIGH COURT OF DELHI AT NEW DELHI
(EXTRA ORDINARY ORIGINAL JURISDICTION)
WRIT PETITION [C] NO.____________/2011
In the matter of A Public Interest Litigation
ANDIN THE MATTER OF:
Yakesh AnandS/o Late Dr. K.L. AnandS-471, Greater Kailash,
Part-II, New Delhi .. PetitionerVersus
1. Union of India,Through its Secretary,Department of Telecommunications,Sanchar Bhawan, 20, Ashoka Road,New Delhi-110001
2. Ministry of FinanceThrough its SecretaryNorth Block, New Delhi
3. Ministry of Home AffairsThrough its SecretaryNorth Block, New Delhi
4.Telecom Regulatory Authority of India [TRAI]Through its Chairman,
Mahanagar Door Sanchar Bhawan,Jawaharlal Nehru Marg(Old Minto Road),New Delhi 11 00 02
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5. Bharti Airtel LimitedBharti Crescent,1, Nelson Mandela Road,
Vasant Kunj, Phase II,New Delhi 110 070, India
6. M/s Idea Cellular Ltd.A-30, Mohan Co-operative Industrail Area,Mathura Road, Mathura RoadNew Delhi, Delhi 110044
7. M/s. Vodafone Essar Mobile Services Limited,C 48, Okhla Industrial Area, Phase II,New Delhi 110 020 .. Respondents
WRIT PETITION UNDER ARTICLE 226 OF THECONSTITUTION OF INDIA CHALLENGING THE PROVISIONOF 3G SERVICES BY SOME OF THE TELECOM OPERATORSIN INDIA WITHOUT OBTAINING VALID LICENSE FOR THE
SAID SERVICES.
To,
THE HONBLE CHIEF JUSTICE OF DELHIAND HIS COMPANION JUDGES OF THE HIGHCOURT OF DELHI, NEW DELHI
MOST RESPECTFULLY SHOWETH:
1. The present writ petition is intended to be filed in PublicInterest and be treated as Public Interest Petition. That the
petitioner has no personal interest in the present writ
petition and the litigation against the respondents herein.
That the petition is not guided by self-gain or for gain of
any other person/institution/body and that there is no
motive other than of public interest in the writ petition.
2. The information, date and facts stated in the writ petitionand documents annexed are all available in the official
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website of the respondent No. 1 & 4 and in the media.
The facts stated in the Writ Petition have been checked
and verified with the information available on the net bythe petitioner and his associates, before filing the present
petition.
3. The present petition is being filed in public interest for thebenefit of the general public and to save the government
from the revenue loss of more than Rs. 20,000/- crores.
The Petitioner herein has been sincerely working for the
cause of protecting the national and public interest and
the interests of public at large and also matters relating to
environment and natural resources.
4. The petitioner is a practicing advocate before the HonbleSupreme Court and this Honble Court for last over 30 years. That the petitioner alongwith his associates have
filed and pursued various writ petitions concerning public
interest issues, before this Honble Court, Honble Punjab
and Haryana High Court and before the Honble Supreme
Court. That the petitioner alongwith his associates have
been taking up various issues of public and general
interest with the concerned authorities as a public spirited
citizen.
5. The Petitioner is filing the present petition in the PublicInterest to highlight the irregularities and illegalities being
committed by various private telecom operators in India, in
providing 3G services in different parts of the country, in
violation of license conditions and in violations of various
directions issued by the Department of Telecommunication
[hereinafter referred to as DOT] i.e. the respondent No.1
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herein and various recommendations made by respondent
No. 4 from time to time. The respondent No. 1 to 4 have
failed to investigate and stop the illegal and misuse of 3Gservices and spectrum [air waves used for providing mobile
services] by the telecom operators i.e the respondents No.
5 to 7 herein . The Respondents No. 1 to 4 have not taken
any action and failed to check the unauthorized use illegal
activities of respondent No. 5 to 7, leading to a huge loss of
revenue to the Government and causing threat to thenational security.
6. The respondent No.1, Department of Telecommunicationis responsible for issue of license for providing
telecommunication services, mobile as well as landline in
India. The respondent No.1 is responsible for taking the
policy decisions with regard to the issues concerning tele
communication services in India. The respondent No. 2 &
3 are responsible for the financial and security issues
respectively connected with the telecome licensing.
7. The respondent No.4, Telecommunication RegulatingAuthority of India [hereinafter referred to as TRAI] is a
telecom regulator responsible for recommending terms
and conditions of licenses, fixing tariffs etc. The
Respondent No. 5 to 7 are licensees who have been
issued licenses to provide 3G services in certain
telecom circles in India.
8. The Petitioner submits that the Respondents No.1 and 4have ignored the clear violations of licence conditions by
respondent No. 5 to 7 in the provision of 3G services
leading to huge financial loss to the National Exchequer
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and also causing grave national security risk to the
country. The loss to the National Exchequer is to the tune
of about more than Rs.20,000 crores. The various privateoperators have entered into agreements among themselves
for using each others network & spectrum and provide
3G services, even in those areas and circles in India,
where they neither have the licence nor any 3G spectrum,
thus entering into 3G area of operation through the back-
door.
9. The petitioner submits that various private operators andin particulars the respondent No. 5 to 7 are gaining a
backdoor entry into 3G services without having a valid
license to provide the said services. Further, the said
operators do not have the necessary spectrum for
providing 3G services in all the circles. The said
operators have not paid the price for receiving the 3G
spectrum arrived at through auction to the respondents.
The said operators are entering into spectrum sharing
agreement amongst themselves in different telecom
circles, where one or two of the operators have got the 3G
spectrum & license and others have failed to obtain the
same. This private arrangement amongst some of the
telecom operators amount to defrauding the Government
of crores of rupees towards spectrum fees. The said
operators have avoided to make payment of 3G spectrum
fee and by passed the roll out obligations imposed by the
DOT on the 3G licencees and also vitiate the auctioningprocess adopted by the DOT, not only for the present but
also in future.
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10. The petitioner submits that the issues raised in thepresent writ petition are of great public importance and in
particular are as follows :(i) Violation of licence conditions by the 2G and 3G
licensed service providers.
(ii) Some private operators providing 3G services without 3G license and without having 3G
spectrum.
(iii)
Non-payment of 3G spectrum fee causing loss tothe tune of more than Rs 20,000 crores to the
national exchequer.
(iv) Violations of the DOT orders which prohibit sharingof spectrum.
(v) Violation of DOT directions for getting theequipment security cleared for providing 3G
services.
(vi) Providing 3G services by non-licenced operators bywrongly interpreting the orders of the DOT.
(vii) DOT keeping silent on the violations of licenceconditions and on loss of more than Rs 20,000
crores to the national exchequer.
(viii) Reduction in tariff based competition, i.e. cartelbased working of the operators.
These issues are explained in detail in the paras herein
below:
11. The Petitioner has been working in various areas of publicinterest in different High Courts in the country and have
represented various cases relating to environment
mattersrelating to ground water depletion level in
Gurgaon. A public interest petition being W.P (C) No.
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4168/2008 titled as Sunil Singh Vs. Union of India &
Ors. was filed before this Honble Court. As this Honble
Court declined to intervene on account of jurisdiction ofthis Honble Court to try and entertain the petition.
Subsequently a writ petition has been filed before the
Honble Punjab & Haryana High Court at Chandigarh.
The said writ petition is being pursued by the petitioners
Associates. The petitioner in the past had also pursued
public interest writ petition concerning variousenvironmental issues before the Honble High Court of
Sikkim at Gangtok few years back.
12. In the area of telecom and consumer issues, thePetitioner herein has been defending and perusing writ
Petitions bearing Nos. 583 of 2007 in the matter of
Cellular operators Association of India & Ors. Vs. Nivedita
Sharma & Ors, C.M (M) No. 174/2007 in the matter of
Telecom Regulatory Authority of India Vs. Nivedita
Sharma & Ors and C.M (M) No. 443 / 2007 in the matter
of ICICI Bank Ltd. Vs. Nivedita Sharma & Ors. relating to
unsolicited calls on mobile numbers which are a source
of nuisance and irritation to the subscribers before this
Honble Court. These petitions had arisen out of the
orders passed by the Honble State Consumer Disputes
Redressal Commission. The issue is presently pending
before the Honble Supreme Court of India in appeal being
SLP [C] No. 17213 of 2010, titled as Nivedita Sharma &
Ors. Vs. Cellular Operators Association of India & Ors.The main issues in the said appeal are as follows:-
(i) Whether the Honble State Commission has powersunder Section 14 (i) (d) read with Section 27 of the
Consumer Protection Act, 1986 to award
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penalties/punitive damages when the respondents
failed to abide by the orders passed?
(ii) Whether the State Commission is empowered toimpose punitive damages amounting to Rs. One crore
collectively on different respondents considering the
fact that the pecuniary jurisdiction of the State
Commission is upto to Rs. One crore?
(iii)
Whether the service providers of mobile telephones inIndia can be allowed to share information of its
customers of any kind including disclosure of the
mobile numbers to the banks or any other finance
companies, insurance companies, telemarketing
companies, their associates/ call centers /agents
etc .?
(iv) Whether the orders of the State Commission passedfrom time to time in different petitions and in
particular in the complaint petition of the petitioner
restraining them from making any call or giving any
SMS of any client to any person without his consent
have been floated and misused by making unsolicited
calls disturbing the customers?
(v) Whether the guidelines issued by TRAI to the mobileoperators and in particular to install DO NOT CALL
registry facility are being followed in its true letter
and spirit?
(vi) Whether the measures taken so far by Reserve Bankof India, Banks and Services Providers and other
Agencies being affective in reducing the number of
unsolicited messages and calls?
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(vii) Whether the Honble High Court was justified indisposing off the W.P. of the respondents, without
deciding the core issues w.r.t. unsolicited calls andSMS being sent by unauthorized persons?
(viii) Whether the Honble High Court by passing thejurisdiction of the Honble National Commission, had
jurisdiction to try and decide by way of a Civil Writ
Petition, the orders of the Honble State Commission,
against whose order no mandatory appeal was filed?(ix) Whether it was mandatory for the respondents to file
an appeal under Section 19 of the Consumer
Protection Act, 1986 as amended before the Honble
National Commission challenging the orders of the
Honble State Commission?
(x) Whether the Honble Commission has jurisdictionunder the Consumer Protection Act to issue
directions to Telecom Regulatory Authority of India
(TRAI) to introduce the DO NOT CALL registry and
thereby foreclose the statutory consultation process
being carried out by TRAI?
13. One of the issues being examined by the Honble SupremeCourt in the matter of Nivedita Sharma Vs. Cellular
Operators & Ors. in addition to the above stated questions
of law is about the jurisdiction of the Honble High Courts
to exercise its jurisdiction under Article 226 & 227 of the
Constitution of India where alternative remedy of filing an
appeal under a statutory law is provided.
14. The petitioner is filing the present writ petition in largerPublic Interest to seek directions from this Honble Court
to the Respondent No.1 & 2 to take appropriate action to
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avoid the loss of substantial revenue to the Government
exchequer and to order investigation and immediate
stoppage of the illegal operation of 3G services by non-licensed operators viz. Respondent NO. 5 to 7 herein. The
Petitioner also seeks directions to the Respondent No.1 &
2 to take appropriate action for the violation of License
conditions by various private operators who are providing
3G services without 3G license in different parts of the
country. The respondent No. 1 to 4 have failed to check &correct the anomaly by which the unlicensed operations
are providing 3G services in different circles/sectors in
different parts of the country. The Respondent No. 1 to 4
have further failed to take action against the respondent
No. 5 to 7 who have illegally and unlawfully permitted the
sharing of their 3G spectrum with those operators who
were not awarded the license to provide 3G services. There
had been no provision in the DOT guidelines for sharing of
the spectrum by the telecom operators. The issues raised
in the present petition are of great public importance are
explained in detail in the paras herein below.
Brief background of the case:
15. During last one year there has been a large mediaattention relating to what is called 2G Scam which is
presently under consideration in the Court of Special CBI
Judge, New Delhi. The Honble Supreme Court, in a
Public Interest Litigation, after hearing the case for over a
period of time, issued various directions. On the basis of
the said directions, criminal complaints against some of
the persons involved in the 2G Scam were filed before the
Special CBI Court. The Honble Supreme Court is
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monitoring the progress of the said case. One of the major
issues raised in the said 2G scam case is that the scarce
national resource of spectrum (airwaves used for providingmobile services) has not been auctioned but has been
given free to the private telecom operators leading to a
huge loss of about Rs 31,000 crores to the national
exchequer as estimated by the CBI. This matter is already
being tried in the Special CBI Court, New Delhi. The
present petition does not relate to 2G spectrum allotmentbut highlights the anomalies in sharing of 3G spectrum
by the 3G license holders with the non-3G license
holders in different sectors in different parts of the
country. The anomalies have led to misuse and illegal
sharing of 3G spectrum by operators who have not
obtained the license for providing 3G services and have
not paid the spectrum fee for the same. The use of 3G
spectrum by non license holders is causing huge financial
loss to the National Exchequer in what can be called a
new 3G Scam.
Auction of 3G spectrum:
16. Till 2008, licenses have been issued by the RespondentNo.1 (DOT) on the basis of recommendations from the
Respondent No.2 (TRAI) for providing 2G services. The
spectrum was not auctioned but was given as a part of the
Licence. This is what led to the 2G spectrum scam
referred hereinabove.
17. In order to overcome the anomalies in the allotment of 2Gspectrum and grant of licenses, the respondent No.2
conducted studies and recommended that the
allocation of 3G spectrum should be done through
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auction only. In its recommendations dated
27.09.2006, inclause 4.59 it is stated as follows :
4.59. The Authority recommends that the spectrumauction for 2.1 GHz band should use a simultaneousascending auction system.
The relevant extract of TRAI recommendation dated
27.9.2006 is attached herewith and marked as Annexure:
P-1.
18. The respondent No.2 in its said recommendations dated27.9.2006 also specifically held that 2G and 3G services
are different and 3G services cannot be considered as an
extension of 2G services. The relevant extract of the
respondent No.2 recommendation dated 27.09.2006 are
reproduced below:
3.8. Hence the Authority recommends that 3Gcannot be perceived as an automatic extensionof 2G and would need to be viewed as a kind ofstandalone service for specialized needs and itsallocation criteria has to be specific separately.
{Emphasis added}
19. The Respondent No. 4 has also explained the 3G servicesas,
S.2. Third generation (3G) systems represent the nextstep in the evolution of mobile cellularcommunications. 2G systems focus on voicecommunication, while 3G systems support increaseddata communication. They allow high-speed data of atleast 144 kbps, mobile Internet access, entertainment,
and triple-play converged communications services,and have markedly greater capacity and spectrumefficiency than 2G systems.
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The respondent No.2 in para 4.2 also explained the
differences in 2G services and 3G services as,
4.2. Both the range of services as well as thedemographic characteristics of subscribers for 3Gservices is significantly different from 2G services. Asdiscussed in Chapter 3, the 2G services will havespectrum for their present and medium-term needs.Existing telecom service operators thus have a clearand separately identified road map for growth in 2Gservices and 3G services with reference to spectrumavailability.
Thus, it is clear that the 2G and 3G are clearlyidentifiable different services working in different
frequency bands. A 2G Unified Access Service (UAS)
licensee is not automatically allowed to provide the 3G
services without allotment of 3G spectrum.
The respondent No.1 accepted this recommendation of
respondent No.2 on 09.12.2008. This fact is clear from
the chart available on the official website of the
respondent No.1. A copy of chart downloaded from the
net is attached herewith and marked as Annexure: P-2.
20. For the purpose of the auction of 3G spectrum, therespondent No.1 issued a Notice Inviting Applications (NIA
in short) on 25.2.2010 vide no. P-11014/13/2008-PP
inviting applications from the interested parties by
19.3.2010 for bidding for 3G spectrum. The holders of
Unified Access Services Licence (UASL) /Cellular Mobile
Telephone Service (CMTS) licences were eligible for
participation in the 3G auction. A copy of the said NIA is
attached herewith and marked as Annexure: P-3.
Provision of 2G services under UASL Licence:
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21. The UASL service licence holders are allowed to provide alltypes of access services, whether fixed line basic service or
mobile service, commonly called 2G services. The relevantextracts of the licence condition of UAS Licence about the
scope of service is reproduced below:
2.2 (a) The SERVICE cover collection, carriage,transmission and delivery of voice and/or non-voiceMESSAGES over LICENCEESs network in thedesignated SERVICE AREA and includes provisionof all types of access services. In addition to this,
except those services listed in para 2.2 (b) (i) licenceecannot provide any service/ services whichrequire a separate licence. However, the licenceeshall be free to enter an agreement with other serviceprovider(s) in India and abroad for providing roamingfacility to its subscriber under full mobility serviceunless advised /directed by Licensor otherwise{ Emphasis added}
There are two important points which emerge from
the scope of service of 2G licencees:
(a) They can provide service in the service area wherethey have been given a licence.
(b) They can not provide services for which a separatelicence is required.
Provision of 3G services by the three private operators i.e
the respondent No. 5 to 7, is a violation on both the above
accounts i.e., providing 3G service in the service area
where this licence has not been granted and providing
service for which a separate licence is required. Details of
the UASL License are available on the website of the
respondent No. 1 [www.dot.gov.in]. A copy of the relevant
extract of a UASL licence relevant for the purposes of the
present writ petition is attached herewith and marked as
Annexure: P-4.
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22. The Service under the UASL licence admittedly allowed alltypes of service but did not allow the provision of 3G
services as otherwise there was no need for the DOT to
auction separate spectrum for 3G and issue an
amendment in the UASL licence only in respect of those
bidders who have been declared successful in the 3G
spectrum auction. This is further explained in the paras
herein below.
23. In addition to the existing UASL/CMTS licencees, the NIAalso provided that those entities which have previous
experience of running 3G services and undertake to obtain
a new UASL licence, shall also be eligible to apply for the
auction of 3G spectrum. This also clearly brings out
that the UASL and 3G were different, otherwise suchbidder could provide only 3G services and there was
no need for them to obtain a separate UAS licence for
2G services.
24. The 2G services are provided under the UASL licenceusing 800/900MHz/ 1800 MHz spectrum bands. These
spectrum bands are popularly called 2G spectrum bands.
The Licensor obviously did not permit the use of 2G
spectrum for providing 3G services and that is why 3G
spectrum was separately auctioned and 3G services were
to be provided only after getting the UASL 2G licences
amended to include the provision of 3G services.
25. Based on the TRAI recommendation as referredhereinabove, for the purpose of 3G, the DOT decided to
auction 3G spectrum band popularly called 2.1 GHz
band. {1920-1980 MHz paired with 2100-2170 MHz =
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60+60 MHz}. The entire 60+60 MHz spectrum in this
2.1 GHz band was not immediately available for
commercial use by the telecom service providers,since some portion of it being used by defence forces.
Therefore, based on the available spectrum in 2.1 GHz
band, the Respondent No. 1 decided to auction three to
four slots for allocation {one slot is of 5 MHz } and the
number of slots and the exact frequency spot in each
circle was indicated in the NIA issued on 25.2.2010,already attached herewith. It is important to note that one
slot of 5 MHz was allotted to the Government PSUs namely
BSNL and MTNL without auction. It was provided that
these Government PSUs would pay the amount for 3G
spectrum fee equivalent to the amount discovered in
auction by the private operators. Thus, even the
Government PSUs were note allowed to have 3G spectrum
without making the payment for the same.
26. For the purpose of service area of telecom licences, thecountry has been divided into 22 circles which roughly
approximate to the boundaries of a State, with few
exceptions like UP which is divided into UP (E) and UP(W),
the North Eastern states are grouped as NE circle, etc. In
each circle there are more than six to eight operators
having UASL licence to provide 2G services.
Amendment of 2G licences to enable provision of 3Gservices:
27. The Respondent No. 1 on 01.09.2010 amended the 2GUASL Licence of the selected bidders who have won the
3G spectrum to permit them to use 3G spectrum and
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provide 3G services. The service licence of the successful
bidders was amended to include the following:
Subject: Amendment of Unified Access Service(UAS) Licence Agreement (s) to use 3G spectrumfor provision of t elecom access services.
In pursuance of Condition 5.1 of the UAS licenceagreements(s), Clause 4.6 of Notice InvitingApplications (NIA) ..the LICENSORhereby inserts the following Condition 23.7 in
the UAS Licence Agreement (s) for.service areas with effect from 1.9.2010.
23.7 Use of 3G Spectrum: The licensee is alsoauthorized to use the 3G spectrum block (asearmarked in the above said Letter of Intent) forprovision of Telecom Access Services as defined in theScope of the licence in the Schedule Condition 2 ofthe UAS Licence Agreement, from the date of award ofright to commercially use the 3G spectrum i.e.
01.09.2010 till the validity of the UAS licenceagreement or for a period of 20 years from01.09.2010, whichever is earlier, subject tocompliance of following conditions:
(i) ..
(ii) Roll out obligations for 3G Spectrum:. TheLicencee shall ensure compliance of following network
roll- out obligations for 3G spectrum for respectivecategory of the licenced service area(s):(a) Applicable to Metro Service areas.
(b) Applicable for Category A, B & C
..
.If the licencee does not complete its roll
out obligations even within the extended period of one year, the 3G spectrum assignment shall bewithdrawn.
(iii) Licence Fee for 3G spectrum: Over and above theLicence fee payable by the Licencees as per condition18.2 of theUAS licence agreement, the licencee shall
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also pay the annual licence fee as share of theAdjusted Gross Revenue (AGR) from the services using3G spectrum as per rates mentioned in condition 18.2
of the UAS licence agreement.{ Emphasis added}
One copy of the amended 2G UASL licence for the purpose
of providing 3G services is attached and marked as
Annexure: P-5 (copy obtained from the DOT website)
28. It is clear from the conditions of the use of 3G spectrumthat the UAS licencees were put to the extra and
additional roll out conditions with the amendment of
their licences for 3G services. The amendment in this
licence was not made in respect of all the 2G
licensees, but only in respect of licencees who have
been successful in 3G auction and paid the spectrum
fee. It is obvious from the above conditions of the
amended 3G licence that the UAS licensees were also
required to meet additional rollout obligations which
would not be applicable to the 2G licensees who were not
successful in 3G auction.
Inter-circle and intra-circle Roaming:
29. As already brought out hereinabove, the licences fortelecom services are issued circle wise. Each UAS licencee
is allowed to provide all the services permitted under the
licence in the licensed service area e.g., AP, MP,
Maharashtra etc. However, the subscribers are not only
moving within the city or the state or the service area butalso in other areas of the country and even abroad. The
services within a service area are called Intra-circle
and services between different service areas are called
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Inter-circle . The concept of Intra and Inter-circle is
relevant, inter alia, for the roaming purposes.
30. Roaming is a concept used in the provision of telecomservices. There may be different service providers in
different service areas. When a subscriber of one service
provider from its home circle, say Madhya Pradesh [MP],
goes to another circle say, Delhi, he requires to be
constantly connected and avail the mobile services even in
Delhi. The service providers have arrangements among
themselves for catering to the service needs of such
subscribers of each other. The MP service provider will
have an arrangement with Delhi service provider to enable
the subscriber from MP to avail of the services in Delhi.
Such arrangements are called roaming arrangements
and such services are called roaming services. Such
kind of arrangements are permitted. In brief, when a
subscriber moves from his home network and goes to
another service area in the network of another operator he
is said to be roaming. This is called inter-circle
roaming, roaming from one State to another. When a
subscriber moves from one country to another, he is said
to be having international roaming based on the
agreement between service providers of one country with
another. Similarly, when a subscriber moves from one
city to another but within the same State or same
service area and he avails the services of another service
provider in other districts of the same State he is said tobe enjoying roaming services which is called intra-
circle roaming.
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31. As already brought out in the paras hereinabove, the UASlicences are issued service area (State) wise and the
licensed operators are allowed to provide the services within the geographical boundaries of that allocated
telecom circle (State). No operator can provide any
telecom service in the geographical area in which he
does not have a licence for the said service.
32. The NIA provided service area wise auction of 3Gspectrum and that operator who were successful in the
service areas for the slots available in that service area
were to be allocated 3G spectrum and allowed to provide
3G services. The respondent No. 1/DOT clearly had no
provision for permitting the 2G service providers, who
have not been successful in obtaining 3G spectrum, toprovide 3G services in a clandestine way through the
back door riding on the network of the selected bidders
who have been issued 3G spectrum and whose licenses
have been accordingly amended to include the provision of
3G services.
33. It is also important to note that the Respondent No. 1after the announcement of results of bidding, issued a
common letter on 21.5.2010 to the selected bidders
indicating the amount of spectrum fee to be paid and
requiring them to make the payment. A copy of the said
letter dated 21.5.2010 is attached herewith and marked as
Annexure:P6. The list of operators and the list of service
areas in which the operators won 3G spectrum is given
herein below:
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List of Circles where 3G Spectrum has been allocatedand where non-licesne operators are providing 3Gservices.
Name of theOperator &
No. ofcircles
Circles where 3G spectrum/licence issued
Circles where 3Gservices are
being provided without 3G
licence/spectrum
BhartiAirtel
(13 Circles)
Delhi, Mumbai, AP, Karnataka, Tamil Nadu, UP (W), Rajasthan,
West Bengal, HP, Bihar, Assam,
North East, J&K.
Haryana,Kolkatta,
Gujarat,
Maharashtra
Aircel Ltd.(13 Circles)
AP, Karnataka, Tamil Nadu,Kolkata, Kerala, Punjab, UP (E),West Bangal, Bihar, Orissa,Assam, North East, J&K.
RelianceTelecom
(13 Circles)
Delhi, Mumbai, Kolkata, Punjab,Rajasthan, MP, West Bengal, HP,Bihar, Orissa, Assam, NorthEast, J&K.
Idea
Cellular(11 Circles)
Maharashtra, Gujarat, AP,
Kerala, Punjab, Haryana, UP(East), UP (West), MP, HP, J&K.
Delhi, Mumbai,
Bihar, Karnataka, Tami l Nadu and
Kolkatta
TataTeleservices
(9 Circles)
Maharashtra, Gujarat,Karnataka, Kerala, Punjab,Haryana, UP (W), Rajasthan, MP.
Vodafone(9 Circles) Delhi, Mumbai, Maharashtra,Gujarat, Tamil Nadu, Kolkata,
Haryana, UP (E), West Bengal.
AP, Karnatakaand Kerala
MTNL /BSNL
The Government had decidedthat MTNL & BSNL will be issued
spectrum for 3G in all India MTNL in Delhi & Mumbai andBSNL in the rest of all telecomcircles.
S-Tel(3 Circles)
HP, Bihar, Orissa
34. From the above table it is clear that the private operatorsgot 3G spectrum and licence in a limited number of circles
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and none had this 3G spectrum in all India i.e. in all
the circles except government operators, i.e. Bharat
Sanchar Nigam Limited/Mahanagar Telephone NigamLtd.
Provision of 3G services by the non-licensed 2Goperators:
35. However, it is clear from the media reports that some ofthe operators, who were not able to obtain 3G spectrum
through auction process, invented a novel and clandestine
way of providing the 3G services through a backdoor entry
even in those service areas where they were not successful
in 3G auction, by entering into intra-circle arrangement
amongst themselves. Copies of some of the media reports
on this issue are attached herewith and marked as
Annexure:P-7 (Colly).
36. The provision of 3G services by entering into intra-circleroaming arrangement in areas where the operators did not
get the 3G spectrum is a violation of the licence
agreements. In fact the three operators, M/s Idea
Cellular, M/s Bharti Airtel and M/s Vodafone, formed a
cartel. This fact is clear even from the details of the 3G
licences obtained by each one of them. It is clear that the
three operators had a pre-bidding secret agreement to
work as a cartel and hence decided to obtain licenses in
some of the areas instead of getting licence in all the areas
and avoid paying the spectrum fee in all the areas, thus
causing a huge loss of revenue to the Government and
gain to themselves.
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37. It is clear from the details of the successful bidders givenin the chart hereinabove that innone of service areas all
these three operators had a licence for 3G. This meansthe three operators i.e. M/s Idea Cellular, M/s Bharti
Airtel and M/s Vodafone did not have even a single
common circle for 3G licence. It can only be called an
interesting and malicious coincidence. It is not difficult
to presume that the said three operators agreed amongst
themselves not to get a licence in the common circles forall the three operators and save the amount of spectrum
fee to be paid for each circle. They can instead enter into
intra- circle agreements later on and provide the 3G
services even without having 3G spectrum, without paying
for 3G spectrum, without permission and without being
subjected to rollout obligations for 3G services.
38. It is the operators who have won bids for 3G spectrum inthe different circles whose licences were amended by the
DOT to include provision of 3G services and permission to
use the 3G spectrum. It is clear that the operators
whose UAS licenses were not amended and who did
not get spectrum in those areas were not entitled to
provide 3G services in those areas. However, as per the
reports, already referred in paras hereinabove, it is
observed that three operators M/s. Bharti Airtel, M/s.
Vodafone and M/s. Idea Cellular have evolved a back door
methodology to provide 3G services in those areas where
they have not won 3G spectrum.
For example, in Delhi service area Idea Cellular Ltd has
not won 3G spectrum and is not entitled to provide 3G
services. However, it is clear from their website that they
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are providing 3G services under the UAS licence for 2G
and have offered various schemes for 3G which are based
on usage, time & data rate base etc. A copy of the IdeaCellular Ltd. website page providing 3G services in Delhi
service area is attached and marked as Annexure:P-8.
39. Similarly, Bharti Airtel has announced 3G services inKolkata, Haryana and Maharashtra/Goa, the service areas
where it does not have the 3G spectrum and licence. The
press reports also state that Airtel is to cover all circles
with 3G by March 2012, though Airtel has licences for 3G
only in 13 circles out of total of 22 circles in the country. A
copy of the press report of Bharti Airtel is attached
herewith and marked as Annexure:P-9.
40. Vodafone does not have 3G license and 3G spectrum inAndhra Pradesh, Karnataka and Kerala circles but is
providing 3G services in Andhra Pradesh, Karnataka and
Kerala circles by entering into an agreement with Idea
cellular Ltd. Vodafone 3G tariff for Kerala is attached
herewith and marked as Annexure:P-10.
41. Media reports attached hereinabove show that M/s. BhartiAirtel, M/s. Vodafone Essar and M/s. Idea have signed
roaming agreements that will allow them to offer 3G
services nationwide. As per the reports, the deal for such
agreement is said to have been announced on July 15,
2011 and this agreement allows both inter and intra-circle
roaming across 22 telecom circles in India. In the said
auction held in March, 2010, Bharti Airtel got 3G
spectrum in 13 telecom circles, Vodafone Essar got 3G
spectrum in 9 circles and Idea Cellular Ltd got 3G
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spectrum in 11 telecom circles. However, this deal will
enable each operator to cover all the circles across
India with the exception of Orissa circle where none ofthese three operators have 3G license. The reports
clearly bring out that intra-circle agreements will allow
each operator to launch services in circles where they are
not licensed and where they do not have 3G spectrum in
2.1 GHz band. The reports further point out that the
agreement among these operators will reduce the tariffbased competition in 3G services as has been witnessed
in 2G services. This means these operators will not
compete among themselves on tariff, which they may fix in
collaboration with each other and the consumer will have
to suffer. Reduction in tariff based competition is
therefore, another name of cartel based working of the
operators. Ovum report dated 21.7. 2011 is attached
herewith and marked as Annexure:P-11.
42. Idea Cellular does not have 3G license in Mumbai but themedia report dated 20th July, 2011 shows Idea launching
3G mobile data services in Mumbai service area. A copy of
the said media report is attached and marked as
Annexure:P-12. The Idea Cellular limited in their
quarterly report ending 30th June, 2011 on page 6 itself
claims that Idea won 3G spectrum in 11 important
service area but it currently offers 3G services in 15
service areas through bilateral roaming agreement with
other operators and Idea subscribers would soon be ableto enjoy 3G service across most part of India through a
combination of home network and roaming arrangements.
A copy of the quarterly report of the Idea Cellular Ltd is
attached and marked as Annexure:P-13.
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Mockery of spectrum auction:
43. The provision of 3G services by those operators who havenot got 3G spectrum through an auction process makes
mockery of first time ever spectrum auction held in India
for 3G spectrum. The very purpose of auction was to
realize the true value of spectrum and give it to those
bidders who bid the highest amount. It was not, and it
could not have been, the intention of the Governmentto allocate spectrum through auction for 3G services
in all telecom service areas to 2 / 3 operators and let
other operators ride on the network of the winning
operators and enter 3G services through a back door
thereby causing a huge financial loss to the national
exchequer and gain to the private operators to provide
3G services even in those areas where the spectrum has
not been won by such operators.
44. It is important to note that the licensor, DOT hascompletely looked the other way and has ignored the
provision of 3G services by those who have not won the
3G spectrum. The DOT has neither challenged nor
questioned the licensees, both UAS licensees of 2G and
UAS licensees for 3G, who have entered into such
arrangements and have bypassed the auction process for
providing 3G services and have caused huge financial loss
to the national exchequer. The inactivity on the part of
the DOT is surprising and needs to be investigated to findout the complicity of the DOT officers, if any, in permitting
such fraudulent activity by the three private operators.
Violation of both 2G and 3G licence agreements:
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45. Petitioner submits that the both the 2G and 3G licenceesare violating their respective licence conditions and
causing huge loss to the national exchequer by providing3G services without spectrum/ licence.
Violations by 3G licensees who won 3G spectrum:
a)Violation of clause 23.7 of the amended UAS licence
for 3G which does not permit 3G service provider to
allow any other operator to use its network andprovide 3G service;
b)3G licensees sharing 3G spectrum with 2G operatorand sharing of spectrum is not permitted as per DOT
guidelines dated 2.4.2008; and
c) Sharing their active network with 2G licencees whosenetwork is not security cleared for 3G, causing
security risk for the country.
Violations by 2G licensees who did not win 3Gspectrum:
a)Providing 3G service under 2G licence.b)No clause 23.7 in their UAS licence permitting use of
3G spectrum- therefore, provision of 3G service is
unathourised.
c) Not paying any spectrum fee for 3G spectrum causinghuge loss to the national exchequer.
d)Not bound by any rollout obligations for 3G.e) Not getting their 2G network security cleared for 3G
services.
f) Provision of 3G services by 2G licensees under roamingarrangements not permitted by the Licensor and also
not recommended by TRAI, the Respondent No. 4
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g) Such fraudulent arrangement not considered orapproved by Full Telecom Commission.
h)No consultation /approval from Ministry of Financesince it involved huge financial implications for the
National Exchequer.
i) No approval from the Security Agencies for providing 3Gservices with 2G network.
j) Huge loss to the national exchequer by not paying the3G spectrum fee but still providing 3G services andearning illegal revenue for themselves.
2G and 3G are different :
46. Petitioner submits that the licensees having UASL licence with 2G spectrum in 800 or 900 /1800 MHz spectrum
cannot provide 3G services in 2.1GHz band because 2G
and 3G are different and 3G services can not be provided
without 3G spectrum and 3G license. The telecom
regulator, TRAI, in its recommendations dated 27.9.2006
also specifically held that 2G and 3G services are different
and 3G can not be considered as an extension of 2G. The
relevant extract of the said TRAI recommendation is
reproduced below:
3.8. Hence the Authority recommends that 3Gcan not be perceived as an automatic extensionof 2G and would need to be viewed as a kind ofstandalone service for specialised needs and itsallocation criteria has to be specific separately.
47. Petitioner submits that If 2G licencees could provide 3G
services without having 3G spectrum:
a) there would have been no need for the TRAI torecommend and DOT to separately and specifically
auction 3G spectrum.
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b)there was no need to amend 2G UAS licence and addclause 23.7 for 3G services.
c) 2G and 3G services work in different spectrum bands.As already brought out hereinabove that 2G services
work in 800/900/1800 MHz bands whereas 3G service
is provided in 2.1 GHz band,
What is the Fraud:
48. Petitioner submits that, simply stated, the fraud is by the
three operators to provide 3G services in those telecom
circles :
a)Where they have not won 3G spectrum in auction.b)Where their 2G licences have not been amended to
permit the use of 3G spectrum.
c)Where they have not paid 3G spectrum fee causinghuge financial loss of more than Rs.20,000
crores to the Government.
d)Where they are violating DOT guidelines dated2.4.2008,which specifically prohibited spectrum
sharing-Sharing of the allocated spectrum will not
be permitted.
e) Where such 2G operators are not getting theirinfrastructure cleared by security agencies for 3G
services creating huge security risks.
f) Where they enter into 3G services through abackdoor.
Methodology adopted for the fraud:
49. Petitioner submits that the three operators have evolved a
novel method to circumvent the rules and avoid payment
of 3G spectrum fee by entering into roaming
arrangements. As already brought out herein above, for
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telecom licensing purpose the country is divided into 22
telecom circles and Licenses are issued for providing
services within the geographical boundaries of a telecomcircle. The 2G and 3G licenses have been issued circle-
wise. These operators have adopted the methodology
of roaming arrangements.
What is Roaming
50. Petitioner submits that under normal roaming
arrangements, subscribers of one place can make use of
the telephone facility at another place when they move
outside the area in which they are registered subscriber.
Example: Mumbai subscriber of operator A coming to
Delhi and continuing to have the mobile service in the
network of operator B in Delhi. For such roaming the
operators have agreements under which their subscriber
use the networks of each other when they move out of their
home location. This concept is used to provide seamless
connectivity to a subscriber throughout the country or
even abroad under international roaming arrangements
with operators of other countries.
51. The concept of inter-circle and intra-circle has already
been brought out hereinabove. Briefly, when a subscriber
moves from one telecom circle to another and uses the
network of another operator it is called Inter-circle
roaming. When a subscriber moves within the telecom
circle from one district to another and uses the network of
another operator - it is called Intra-circle roaming. The
Petitioner submits that it is this method of intra-circle
roaming which has been used by the three operators to
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provide 3G services in the telecom circles where they
do not have 3G spectrum and licence.
52. Petitioner submits that these three 2G telecom operators
invited their subscribers to use 3G services with their own
tariff plans and provided the service by using 3G spectrum
of another operator. These three operators Bharti Airtel,
Idea Cellular and Vodafone are providing 3G services with
2G licence with intra circle roaming under the garb of
DOT order No. 842-725/2005-VAS/269 dated
12.6.2008.
53. Under the said order dated 12.6.2008, DOT had permitted
the intra-circle roaming between two operators in
providing 2G services which means that if two operators
have 2G licence for the same circle they can have intra-circle roaming arrangements and provide 2G services to
their subscribers on the network of another 2G operators.
A copy of the said letter dated 12.6.2008 is attached
herewith and marked as Annexure:P 14.
This order dated 12.6.2008 is not applicable to 3G
54. Petitioner submits that the said order of the DOT dated
12.6.2008 has been wrongly used by these operators since
this order is not applicable in the case of 3G services
due to following reasons:
(a) In the case of 2G both the operators entering into
the roaming arrangement have 2G licence in the
same service area. However in the case of 3G one
operator has a 3G licence and the other does not
have 3G licence.
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(b) In the case of 2G boththe operators are bound by
the roll out obligations under their respective
licences but in the case of 3G only 3G licencee has
the roll out obligations and the other 2G operator has
no obligations for the roll out.
(c) In the case of 2G, spectrum is given to all theoperators along with the licence but in the case of
3G the spectrum is given only to those operators
who have won spectrum through auction and have
paid 3G spectrum fee.
(d) The Respondent No. 4/TRAI had clearly held that 2Gand 3G are different as has been brought out in the
paras hereinabove and hence 2G order can not be
applied to 3G service.
(e) The Respondent No. 4/TRAI in its recommendationsfor 3G auction neither envisaged nor recommended
any roaming arrangement for 3G services by the 2G
operators who have not won the 3G spectrum.
(f) There was no such provision in the NIA issued for3G.
It is thus clear the order dated 12.6.2008 issued for the
2G operators can not be applied to the 3G services and
hence the provision of 3G services by the 2G operators
under the garb of the DOT order dated 12.6.2008 is
invalid, illegal and untenable.
Provision of 3G services under the garb of intra-circleroaming is illegal and invalid.
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55. Petitioner submits that the provision of 3G services by the
2G operators under the garb of intra-circle roaming
guidelines dated 12.6.2008 is illegal, invalid and ought not
to be allowed. The illegality of the same is clear from the
following:
a) One operator has a 2G licence and the other
operator has 3G licence in the same telecom circle.
b) 2G operator is not having 3G spectrum and has not
paid the spectrum fee for 3G.
c) 2G operators licence has not been amended to
include permission to use 3G spectrum.
d) 2G operator is using /sharing 3G spectrum of
another operator for providing 3G services. Sharing
of spectrum is not permit ted by DOT order.
e) 2G operators network is not security cleared for
providing 3G services.
56. The petitioner respectfully submits that the Respondent
No. 5 to 7 have entered into a criminal conspiracy to cheat
the Government and defraud the government of huge
revenue and corresponding gain to themselves. The
criminal conspiracy is evident from their conduct that they
deliberately did not attempt to get 3G spectrum in all
India when they are already having 2G license in all India.
Moreover all the three operators are not having even a
single telecom circle where all three have got license. This
coincidence is not strange, because the three operators
had a pre-planning to bid for 3G license in few circles and
pay only a part of the spectrum fee, but provide service in
all India by sharing spectrum with each other. Sharing of
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spectrum is specifically prohibited as has been brought
out in the paras herein above.
Clarifications issued in the Notice InvitingApplications (NIA):
57. Petitioner respectfully submits that the respondent
No.1/DOT issued NIA on 25.2.2010 inviting applications
from the interested parties by 19.3.2008 for 3G spectrum
auction, as already brought out in the paras hereinabove.
The DOT also provided that if there are any queries with
regard to the NIA these may be sent to the DOT and these
were to be replied as a consolidated statement. Large
number of queries were raised by the prospective bidders.
The responses to the queries were issued by the
Government, i.e. by respondent No. 1 as a consolidated
statement. A copy of the responses to the queries is
attached herewith and marked as Annexure P15.
58. There are four relevant questions which need to be
brought out and which may be relevant for the issue
raised in the present writ petition. The relevant/related
questions and the answers given by the respondent No.
1/DOT are reproduced below:
Queries Response
4. Will DOT mandate MVNO androaming for losing operators in this
round of the auction as has happenedin other markets where 3G slots areless than number of existing
operators?
At present, mandatoryroaming or mandatory
MVNO is not part of theGovernments telecomspolicy.
11. Please clarify 3G roaming is
mandated or whether it will be abilateral decision between operators?
At present mandatory
roaming is not part of theGovernments telecomspolicy. Roamingarrangements are based onbilateral decision between
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operators.
12. Will intra-circle roaming beallowed in areas where an operator
does not have a 3G network?
Intra-circle roaming will begoverned by the UAS/ CMTS
licence provisions andapplicable Governmentregulations.
48. DOT order No. 842-725/2005-VAS/269 dated 12th June 2008 allowsintra-circle roaming amongst UASLlicensees. After 3G auctions not all
existing UASL licensees will hold 3Gspectrum in any licensed areas due tothe limited 3G blocks on offer. Willcustomers of UASL licenses who do nothold 3G spectrum be allowed to roamon the 3G networks of other UASLs inthe same licensed area? Furthermore,
till such time as more 3G blocks arereleased into the market, will it not be
customer friendly for the Governmentto mandate that 3G spectrum holdersallow the customers of operators notholding 3G spectrum in the samelicensed area to roam on their
networks under an administeredpricing mechanism?
The roaming policy isapplicable to the licencesand not to specific spectrumbands. Hence, roaming will
be permitted. However, atpresent, mandatory roamingor MVNO is not part of theGovernments telecomspolicy.
53. In case a UASL licensee does notsucceed in 3G Bid auction in anyservice area, will he continue to pay
the annual spectrum charges at theprevailing rates for 2G services?
In case a UASL licenseedoes not succeed in the 3Gor BWA Auctions in any
service area, it will continueto pay the annual spectrum
charges at the prevailingrates for 2G services, whichmay be revised from time to
time.
59. It is clear from the table above that the issues regarding
some operators not being successful in 3G auction, were
raised by some bidders and they sought the views of the
respondent No. 1, to provide the service through intra-
circle roaming. The reply of the Government was also
clear that mandatory roaming or MVNO is not a part of
the Governments telecom policy, Intra-circle roaming
will be governed by the UAS/ CMTS licence provisions
and applicable Government regulations.
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60. The Petitioner respectfully submits that there are two
issues in this regard which are important to be brought
out. One is the applicability of these clarifications to the
provision of 3G services and the other is the validity of the
same.
Applicability of the DOT responses to provision of 3Gservices:
61. As regards the applicability of these clarifications for 3G
services is concerned it is stated that the clarifications/
response to queries are not applicable to the provision
of 3G services as is clear from the Important Notice
given at the beginning of the Response document itself, a
copy of which is already attached herewith. The said
Important Notice makes it clear that the document is forinformation purpose only and has no binding force. The
relevant portion of the said Important Notice is
reproduced below:
This document is for information purpose onlyand has no binding force. The documentis not intended to form any part of the basis ofany investment decision or other evaluation orany decision to participate in the Auction andshould not be considered as a recommendationby the Government or its advisers to anyRecipient to participate in theAuctions...
The document does not constitute an offer or
invitation to participate in the Auction, nor does it
constitute the basis of any contract which may
be concluded in relation to the Auctions or in respect
of any allocation of spectrum. {Emphasis
added}
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It is thus clear that the said response to the queries was
not be the basis for entering into any roaming
arrangement and providing 3G services without having 3G
spectrum, without paying for 3G spectrum or having 3G
licence.
Validity of DOT responses for provision of 3G services:
62. As regards the second issue of the validity of the said
response to queries, the Petitioner submits that the said
clarification based on DOT letter dated 12.6.2008 is not
even valid. The said guidelines dated 12.6.2008 were
issued in the context of 2G services and is not valid for the
3G services. In the normal circumstances an operator
who is issued a licence by theDOT is required to set up
his own network as per the mandatory rollout obligations
within the specified time and provide the service to the
customers in accordance with the provision of the licence.
In each service area there are more than 6 to 7 2G
operators to ensure enough competition and better quality
of service to the subscribers at reasonable rates.
63. Initially when the number of operators were only two in
each sector or each service area upto the year 2000-2001,
the Governments intention could be that the operators
should set up their own networks and provide the service
in all the areas for which the licence have been issued to
the private operators. Then the third operator was
introduced in the form of Government operators BSNL /
MTNL in all India. At that stage the DOT did not permit
intra-circle roaming by which one operator could use the
network of another operator for providing the services. The
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development of infrastructure was one of the objectives of
the Telecom Policy also.
64. However, by the year 2007 2008 there were more than 6
to 7 operators in each service area and there was enough
competition and enough networks. If all the operators
have to set up their own networks, there will be
mushrooming of large towers /antennas /BTSs which
could create problems with the environment and the local
authorities.Therefore, the DOT in June 2008 permitted
the intra-circle roaming for 2G licensees providing that
2G service providers in any service area could use the
infrastructure of another operator and provide the 2G
service for which licence has been issued to the operator.
A perusal of the said order dated 12.6.2008[Annexure: P-14] would clearly show that the roaming
arrangement is for 2G services only being provided by the
UAS licensees. Moreover, the said order provides that it is
only a licensee who may enter into mutual commercial
agreement for intra-circle roaming facilities with other
licensees. The order does not envisage the intra-circle
roaming arrangement between one operator who is
having a licence and the other operator who is not
having a required licence. A copy of the said letter dated
12.6.2008 is already attached herein above.
65.The intra-circle roaming for 2G services as brought out inthe above referred DOT letter dated 12.6.2008 cannot,
however, be equated with intra-circle roaming for 3G
services for the reasons already stated hereinabove.
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66. In brief, therefore, the response given by the respondentNo. 1/DOT to the queries raised by various operators is
neither valid nor applicable for the purpose of enteringinto arrangement for providing 3G services with 2G
licence. Any arrangement for providing 3G services with
2G licence under the garb of the said DOT order dated
12.6.2008 or the response to the queries is illegal, invalid
and deserves to be declared void.
67. In addition to the above, the Petitioner respectfully submitsthat, such intra-circle roaming arrangement in respect of
3G services is violation of the licence condition by those
operators who won 3G spectrum in auction and whose
licences have been amended to permit them to provide 3G
services. It is important to note that in response to the
specific query being query No. 12, as brought out in paras
hereinabove, where the prospective bidders sought to know
as to whether intra-circle roaming will be allowed in areas
where an operator does not have a 3G network, the
Government clearly specified that the intra-circle
roaming will be governed by the UAS /CMTS licence
provisions and applicable Government regulations.
68 It is clear that the DOT order dated 12.6.2008 permits
intra-circle roaming only in 2G services. It cannot, however,
mean that UAS licence amendment for 3G will
automatically permit intra-circle roaming for 3G services
also. If it was the intention of the DOT to permit the
operators who have not won the licenses/ spectrum and
still provide 3G services in arrangement with the operators
who have won the spectrum, nothing prevented DOT to
specifically answer the query raised in para 12 in the
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positive. This means the DOT could have straight way said
that those who do not win the spectrum will be permitted to
provide 3G services by entering into intra-circlearrangement with those who have won the
licences/spectrum. This is not the case as revealed from
the facts as stated above and hence the Intra-circle
roaming for providing 3G services is illegal, invalid and
deserves to be declared void on this ground alone.
69. It is also important to note that even DOT cannot claim
that by the said order dated 12.6.2008 and by the said
response to queries in the NIA in respect of intra-circle
roaming, the DOT permitted those who were not successful
for 3G spectrum to tie up with those who have won 3G
spectrum and provide the 3G services without having 3G
spectrum, without having their licences amended, without
having paid the 3G spectrum fee and without being
subjected to the rollout obligations laid down for 3G
licensees. It was clear to the DOT that if such intra-circle
roaming is permitted, then the fee paid by one or two
successful operators to the Government would be shared
secretly among the Respondent No. 5 to 7 putting the
national exchequer to a huge financial loss.
70. The services being provided by the Respondent No. 5 to 7
as brought out in the paras hereinabove clearly show how
the operators bypassed the rules and regulations and
cheated the Government by entering into arrangements
among themselves and providing the services even in those
areas where they have not got the licence and 3G spectrum.
The violation is both by the operators who have
permitted such intra-circle arrangements and allowing
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the non-successful operators to use the 3G spectrum
which was not permitted and also by the operators who
were not successful and have violated their UAS licenceconditions to provide 3G services when their licence does
not permit 3G services.
Sharing of infrastructure:
71. In addition to the above, it is important to note that the
provision of 3G services by the operators whose licenceshave not been amended and who have not been allocated
spectrum through bidding process by sharing 3G
spectrum of the successful bidders, is also a violation of
the guidelines issued by the DOT on 1.4.2008 in respect of
the sharing of infrastructure by various service providers,
which do not permit sharing of spectrum.
72. There are two types of infrastructures in the telecomsector passive and active. The passive infrastructure
includes telecom towers, shelters, dark fiber, buildings etc.
The active infrastructure, on the other hand, includes
antenna, feeder cable, Radio Access Network (RAN),
transmission systems and spectrum. As per clause 33 of
the UAS licence sharing of infrastructure between Unified
Access Service providers (UASL) and any other telecom
service providers in their area of operation is permitted.
Clause 33 of the UAS licence is reproduced below:
33. Shar ing of inf rastructure between UASPs and
any other Telecom Service Provider in theirar ea of operat ions:
The sharing of infrastructure by the LICENSEE is
permitted as below:
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1.Sharing of passive infrastructure viz.,building, tower, dark fiber etc. is permitted.
2.Provision of point to point bandwidth fromtheir own infrastructure within their ServiceArea to other licensed telecom serviceproviders for their own use (resale not to bepermitted) is also permitted.
3.Sharing of switch by the LICENSEE forproviding other licensed services is permitted.
73. The respondent No.2 in its Recommendations dated
11.4.2007 on the subject of Infrastructure Sharing,
recommended that active infrastructure may also be
permitted for sharing. However, even respondent No.2
specifically held that spectrum sharing is not to be
permitted. The relevant extracts of the Recommendationis reproduced below:
3.2.5 Recommendations:
The Authority recommends:
(i) The licence conditions of UASL/CMSP should besuitably amended to allow activeinfrastructure sharing limited to antenna,feeder cable, Node B, Radio Access network(RAN) and transmission system only. Sharingof the allocated spectrum is notpermitted. (Emphasis added)
A copy of the relevant extracts of the TRAI
recommendations dated 11.4.2007 is attached herewith
and marked as AnnexureP-16.
74. Based on respondent No.2/ TRAI Recommendations the
DOT/ respondent No.1, on 1.4.2008, issued guidelines for
sharing of active infrastructure also. However, it was
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specifically provided that the sharing of allocated
spectrum will not be permitted. A copy of the Press
Release dated 1.4.2008 is attached herewith and markedas Annexure P17. The relevant portion of the said
guidelines is reproduced below:
The Department of Telecom has formulated guidelinesfor Infrastructure sharing among service providers.Under the Guidelines, sharing the active infrastructureamongst Service Providers based on mutual
agreements entered among them is permitted.
Active infrastructure sharing will be limited toantenna, feeder cable, Node B, Radio Access Network(RAN) and transmission system only. Sharing of theallocated spectrum will not be permitted. Thelicensing conditions of UASL/CMSP will be suitablyamended wherever necessary to permit such sharing.(Emphasis added)
75. It is clear from the above that the service providers are
permitted to share their infrastructure, both passive and
active, in the area of their operations but sharing of
spectrum is specifically prohibited.
76. Petitioner submits that the provision of 3G services by the
2G operators, whose licences have not been amended and
who have not been allocated spectrum for 3G, is a
violation of the said guidelines dated 1.4.2008 which
do not permit spectrum sharing. Admittedly spectrum has
been allocated to the successful bidders for 3G services
and, as already brought out hereinabove, their licences
have been suitably amended to the permit the use of 3G
spectrum.The amendment in the 2G licence, however,
does not envisage sharing of 3G spectrum with any
other operator. The provision of 3G services by the non-
licenced operators by sharing 3G spectrum with the
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successful operators is therefore, violation of the licence
agreement and also violation of the DOT guidelines dated
1.4.2008. This is illegal, invalid and deserves to bedeclared void since, the licensed operators are permitting
the use of 3G spectrum by the non-licensed operators
which is nothing but sharing of 3G spectrum with the
non-licensed operators, which is specifically prohibited.
This amounts to criminal conspiracy between respondent
No. 5 to 7Loss of revenue of more than Rs 20,000 crores toNational exchequer.
77 Petitioner submits that the provision of 3G services by
non-licenced operators, apart from being violation of 2G
and 3G licences and violation of the DOT guidelines, has
also caused a huge financial loss of more than Rs. 20,000
crores to the national exchequer which could not havebeen done without the connivance of the concerned
officials of the DOT. The loss to the national exchequer
is caused due to the 2G operators not having paid for
the 3G spectrum fee but still using 3G spectrum and
earning revenue from the 3G services.
78.The Petitioner submits that after the successful auction of3G spectrum, the DOT issued the results of the auction on
21.05.2010. A copy of the DOT letter dated 21.05.2010 is
attached herewith and marked as Annexure P- 18.
Perusal of the said letter brings out that in five (5) telecom
circles namely Punjab, West Bengal, Himachal Pradesh,
Bihar and J&K, there were (4) operators and in rest of the
circles there were (3) operators. A few samples of the
successful bidders in some service areas and the amount of
spectrum fee paid by them is indicated below. The table
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below also shows area wise loss to the exchequer due to
non-licenced service provider providing 3G services without
paying spectrum fee.Delhi Circle
WinningPrice (Rs.
Cr)
Successful Bidders Service providedwithout paying
Spectrum fee
Loss to theexchequer
(Rs. Crs)
3316 Vodafone Essar Ltd.Idea Cellular Ltd. 3316
3316 Bharti Airtel Ltd.
3316 Reliance TelecomLtd.
Mumbai Circle
WinningPrice
(Rs. Cr)
Successful Bidders Service providedwithout paying
spectrum fee
Loss tothe
exchequer(Rs. Crs)
3247.07 Vodafone Essar Ltd.Idea Cellular
Ltd.
3247.07
3247.07 Bharti Airtel Ltd.
3247.07 Reliance Telecom Ltd.
A.P. Circle
WinningPrice
(Rs. Cr)
SuccessfulBidders
Service providedwithout paying
spectrum fee
Loss tothe
exchequer(Rs. Crs)
1373.14 Bharti Airtel Ltd.Vodafone Essar Ltd. 1373.14
1373.14 Idea CellularLtd.
1373.14 Aircel Ltd.
Kerala Circle
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Winning
Price(Rs. Cr)
Successful Bidders Service provided
without payingspectrum fee
Loss to
theexchequer(Rs. Crs)
312.48 Idea Cellular Ltd.Vodafone Essar
Ltd.312.48
312.48 Tata Teleservices Ltd.
312.48 Aircel Ltd.
Karnataka Circle
Winning
Price(Rs. Cr)
Successful Bidders Service provided
without payingspectrum fee
Loss to
theexchequer(Rs. Crs)
1579.91 Bharti Airtel Ltd..
Vodafone EssarLtd.
312.48
1579.91 Tata Teleservices Ltd.
1579.91 Aircel Ltd.
Haryana Circle
WinningPrice
(Rs. Cr)
Successful Bidders Service providedwithout paying
spectrum fee
Loss tothe
exchequer(Rs. Crs)
222.58 Idea Cellular Ltd.Bharti Airtel Ltd. 222.58
222.58 Tata Teleservices Ltd.
222.58 Vodafone Essar Ltd.
Gujarat Circle
Winning
Price(Rs. Cr)
Successful Bidders Service provided
without payingspectrum fee
Loss to
theexchequer(Rs. Crs)
1076.06 Tata Teleservices Ltd.Bharti Airtel Ltd. 1076.06
1076.06 Vodafone Essar Ltd.
1076.06 Idea Cellular Ltd.
Maharashtra Circle
WinningPrice
Successful Bidders Service providedwithout paying
Loss tothe
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(Rs. Cr) spectrum fee exchequer
(Rs. Crs)
1257.82 Tata TeleservicesLtd. Bharti Airtel Ltd. 1257.82
1257.82 Vodafone Essar Ltd.
1257.82 Idea Cellular Ltd.
From the tables given above, it is clear that the non-
licensed operators in various telecom circles are providing
3G services without having paid 3G spectrum chargesthus leading to huge financial loss to the National
Exchequer. If the total of the circles is arrived at by
adding the loss for each circle the total comes to Rs
20.570 crores.
79. The Petitioner submits that the loss to the nationalexchequer on all India basis can also be observed from the
data given in the table of the successful bidders and the
amount paid by each, annexed herein above. Briefly the
loss is estimated as follows:
BSNL/MTNL paid Rs.16750 crores for all India 3Gspectrum/ licence.
Bharti Airtel paid Rs.12295 crores for 13 circles butwill provide 3G service in all India.
Idea cellular paid Rs.5768 crores for 11 circles butwill provide 3G service in all India.
Vodafone paid Rs. 11617 crores for 9 circles but willprovide 3G service in all India
If all three above named operators had paid theentire spectrum fee for all India 3G spectrum and
licence:
Actual amount which the three operators
would have paid Rs.16750 X 3 = Rs50,250 crs.
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Actual amount paid by three operators =Rs.29681 crs.(Rs.12295/-+ Rs.5768/-+Rs.11617/-)
Loss caused to the National exchequer = Rs. 20,569 crs.
Approx. Rs 20,570 crs.
80. From the details stated hereinabove it is clear that threeoperators namely Bharti Airtel, Vodafone and Idea Cellular
won 3G spectrum and paid the 3G spectrum fee only in few
circles but are also providing 3G services in those circles
where they had not obtained 3G spectrum and did not pay
the spectrum fees. The petitioner submits that in actual,
the above said three operators are providing 3G services in
all circles in India. The said operators have therefore
avoided payment of spectrum fee in most of the circles
in all India and causing huge financial loss to thenational exchequer.
81. The petitioner submits that the Respondent No. 2failed to check this practice of providing 3G services
by the non-licensed operators without paying the
spectrum fee. This inaction on the part of the
respondent No. 2 has resulted in huge financial loss to
the national exchequer.
82.The Petitioner submits that one of the important issues inthe ongoing trial in the Special CBI Court in respect of 2G
scam is the huge loss caused to the national exchequer.
The present case of3G scam is also causing huge
financial loss to the national exchequer and the case
needs to be investigated by the CBI as well by Central
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Vigilance Commission [CVC] under the supervision of this
Honble Court and it is prayed accordingly.
No security clearance for 3G services:
83. The petitioner submits that the provision of telecom
services in the country is now subject to clearance of the
equipment by the security agencies due to monitoring
facility required by them. The BSNL/MTNL are
government operators and they were allocated 3Gspectrum earlier When these government operators
desired to start the 3G services in 2009 without getting
their equipment for 3G cleared by the security agencies,
the Respondent No. 1 issued a directive to BSNL/MTNL to
stop their 3G services till call monitoring services are
made available to the Intelligence agencies. A press report
dated 09.03.2009 is attached herewith and marked as
Annexure: P-19.
84. The petitioner submits that the directive of the respondent
No. 1 to its own units BSNL/MTNL clearly shows that the
provision of 3G services without security clearance is not
permitted. The Provision of 3G service by the non-licenced
operators not only is a violation of Licence conditions,
DOT guidelines, and causing huge financial loss to the
Government but is also a risk to the national security in
the absence of clearance of monitoring facility in the
equipment. Due to various terrorist activities in the
country using different techniques the Government has
been taking various actions. One of the series of acts is
the clearance of the telecom equipment by the DOT. The
provision of 3G services or any telecom service is subject
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to the prior approval of the equipment by the DOT which
in turn gets the approval from the security agencies.
85. The DOT issued a letter to all the operators on 8.11.2010
directing that all the operators should get their equipment
tested to ensure that the monitoring facility is available in
the equipment /network before using the equipment in
their network for providing the telecom services. No service
is to be started without prior approval of the Licensor. Acopy of the said DOT letter dated 8.11.2010 as available
on the DOT website is attached herewith and marked as
Annexure: P-20.
86 The Petitioner submits that as per the order of the DOT
dated 08.11.2010, no service can be started without
putting in place the required monitoring facility. The 2G
operators might have informed the DOT about 2G services
and got their equipment security cleared for 2G services.
However, it is not clear whether these non-licensed
operators informed the Respondent No. 1/ DOT about the
start of 3G services without having 3G spectrum and 3G
licenses. It is also not clear as to whether the DOT has
taken any action. In any event, the Petitioner submits
that the action of the non-licensed operators and any
action on the part of the DOT would be violation of the
license conditions as well as the DOT Guidelines. In case
the DOT has given clearance to the 2G operators for
providing 3G services without 3G license, it is a violationof the license conditions by the DOT by giving approval to
a non-licensed operator to provide 3G services. In case
the DOT has not given any such clearance, then also it is
a violation by the non-licensed 2G operators to provided
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3G services without getting their equipment / services
approved from the DOT from the security angle. Apart
from the violations of the licence or DOT guidelines suchactivity by the non-licenced service providers causes a
huge risk to the national security since unapproved
equipment is used by the non-licenced operators to
provide 3G services.
87.
The petitioner submits that the respondent No. 3 failed tocheck that 3G services are being provided by the non-
licensed operators without getting their equipment cleared
for 3G. It is important to note that terrorism has assumed
alarming proportions and any inaction in security matters
is a serious lapse. The inaction on the part of
Respondent No. 3 has enabled the non-licensed operators
to provide 3G services without DOT approval for
monitoring facility which is the requirement as indicated
vide its letter dated 08.11.2010.
No roll out obligations for the non-licenced operators:
88. The Petitioner submits that for each telecom license for
provision of various services, the DOT imposes certain
rollout obligations in terms of providing the services in
urban and rural areas to ensure that the operators do not
concentrate only on lucrative urban or Metro areas for
provision of services. The importance of the rollout
obligations in telecom service licenses can be seen fromthe recent media reports bringing out TRAI
recommendations to DOT to cancel the licenses of those
operators who have not fulfilled the rollout obligations for
their 2G licenses.
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89. The petitioner respectfully submits that the provision of
3G services by the non-licenced operators is also invalid
and in violation of the Licence conditions because
these non-licenced operators are not subjected to any
roll out obligations which are attached with the 3G
licencees. As already brought out in the paras
hereinabove, the DOT amended the licence conditions of
the successful bidders of 3G and incorporated an
additional clause in the UASL licence as condition
No.23.7. This condition inter alia, provides for the roll out
obligations to be met by the licencees. The relevant portion
of the said amendment and clause 23.7 is reproduced
herein below:
Roll out obligations for 3G Spectrum:. The
Licencee shall ensure compliance of following networkroll- out obligations for 3G spectrum for respectivecategory of the licenced service area(s):
90. Petitioner submits that these non-licenced operators haveneither paid the 3G spectrum fee, nor have the 3G
spectrum, nor their licences have been amended but they
are providing 3G services and they are not subjected to
any roll out obligations, to which the licenced operators
are subjected. These non-licenced operators do not have to
make any expenditure for the fulfillment of roll out
obligations which the licenced operators have to incur to
meet the roll out obligations. The rollout obligations are
provided in clause 3.4 of the NIA and are also included in
clause 23.7 of the amended UAS licence for 3G operators.
The relevant extracts of the provision relating to roll out
obligations have been brought out in the paras
hereinabove. For the Metro areas the service has to be
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provided in 90% of the service area within 5 years of the
effective date of the licence. And in case of telecom circles
at least 50% of the District Head Quarters (DHQs) are to becovered within 5 years of the effective date and out of
which at least of 15% of DHQs have to be rural.
91. Petitioner submits that the non-licenced operators willconcentrate only on the lucrative urban markets and earn
more revenue than the licenced operators who have to meet
the roll out obligations in the rural areas also. Thus these
non-licenced operators do not pay for the spectrum and do
not have to meet any roll out obligations and will be in a
more advantageous position than the licenced operators
creating non-level playing field for the licenced operators
apart from causing loss to the national exchequer and
creating security risk for the country.
Fate of future auctions.
91. The Petitioner respectfully submits that in case such afraudulent practice is not checked at the initial stage itself
and unless strict criminal action is taken against the
defaulters including action as per the licence conditions,
such practices would make a mockery of any future
auction which the DOT may hold for giving spectrum.
92. The petitioner submits that at present only 3