copy of petition filed before delhi high court

8/4/2019 Copy of Petition Filed Before Delhi High Court

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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

rollout 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


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


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)


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)



Loss to


1579.91 Bharti Airtel Ltd..

Vodafone EssarLtd.

312.48


1579.91 Aircel Ltd.

Haryana Circle

WinningPrice

(Rs. Cr)


spectrum fee

Loss tothe

exchequer(Rs. Crs)

222.58 Idea Cellular Ltd.Bharti Airtel Ltd. 222.58


222.58 Vodafone Essar Ltd.

Gujarat Circle

Winning

Price(Rs. Cr)



Loss to


1076.06 Tata Teleservices Ltd.Bharti Airtel Ltd. 1076.06


1076.06 Idea Cellular Ltd.

Maharashtra Circle

WinningPrice


Loss tothe


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(Rs. Cr) spectrum fee exchequer

(Rs. Crs)

1257.82 Tata TeleservicesLtd. Bharti Airtel Ltd. 1257.82


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

copy of petition filed before delhi high court

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