NEW DELHI: India’s telecom tribunal overturned a ban on companies sharing high-speed, third-generation (3G) networks in a ruling that was scathing about the DoT and the regulator and came as a big relief for service providers that don’t have 3G spectrum across circles. The ruling on Tuesday also eases capital pressure on the industry, which already has to contend with the high price of frequencies.The Telecom Disputes Settlement and Appellate Tribunal ( TDSAT ), in addition, quashed Rs 1,200 crore in penalties imposed on Bharti Airtel Vodafone India and Idea Cellular by the telecom department, which had accused the nation’s top three operators of violating licensing rules by entering into 3G network-sharing agreements.The government can appeal to the Supreme Court against the TDSAT order. That appeared likely as Telecom Minister Kapil Sibal said the government still maintained that the licence agreements clearly forbid network sharing.The two-judge bench headed by Justice Aftab Alam was highly critical of the basis on which the Department of Telecommunications (DoT) had barred the 3G pacts, saying that prior to the auction of 3G frequencies in 2010, the terms of the unified access service (UAS) licence allowed such sharing.It also took strong exception to the telecom regulator saying that the intra-circle roaming (ICR) pacts were illegal, saying that its logic for doing so was flawed.While the lobby group of GSM companies welcomed the ruling, none of the operators individually spoke on the matter. “We are very gratified with the ruling,” said Rajan Mathews, secretary-general of the GSM group. According to him, before entering into the agreements, the companies had asked the department whether such arrangements were legal “and DoT had replied in the affirmative”.If rival companies can sell services in areas where they don’t have airwaves though such intra-circle arrangements, it will allow them to avoid having to buy spectrum and set up infrastructure at a time when demand for data services is growing exponentially. Since the government started selling airwaves through auctions in 2010, the price of the most important asset of telecom companies has increased sharply. In fact, heavy debt taken on to buy airwaves had prevented some of the operators from spending on network expansion. DoT had submitted before the tribunal that in order to provide 3G services, an operator had to possess a 3G licence that was an amended 2G licence.However, the two-judge bench, while referring to the clarifications given by the telecom department before the 3G auction, said, “The response of the DoT was clear that there were no separate 2G and 3G service licences.” DoT’s answers “leave no doubt that according to the stand taken by the central government immediately before the auction, the provisions of the UAS licence permitted intra-circle 3G roaming,” the tribunal said.The appellate tribunal said the logic of the Telecom Regulatory Authority of India in branding 3G roaming illegal was “flawed”. The tribunal said the licence in no way prohibits an operator from providing 3G services. It also criticised the regulator for saying this would lead to an unfair advantage for some.“The question of non-level playing field would arise only if by this arrangement the 3G operator entering into the arrangement could manage to get higher quantum of spectrum. In conclusion we are constrained to say that the regulator has taken an erroneous stand,” the judgement has said.Sanjay Kapoor, former chief executive of Bharti Airtel , told ET that the ruling would allow for more efficient use of spectrum and help address anomalies in the spectrumsharing policy. “This is very good news for the industry,” he said.According to Kapoor, the draft guidelines on sharing of spectrum had made it clear that operators may share spectrum for which the companies had paid an auction-determined price.But then the government prevented them from sharing 3G airwaves. In 2010, Bharti Airtel and other operators bid thousands of crores of rupees to acquire bandwidth in a government auction to provide 3G services. Because of the steep price, no company bought pan-India spectrum.In 2011, Bharti Airtel, Vodafone and Idea entered into pacts that allowed them to share the spectrum and sign up 3G customers in places where they didn’t win airwaves in the auction. The government ruled these arrangements illegal and slapped penalties of Rs 350 crore on Bharti Airtel, Rs 550 crore on Vodafone and Rs 300 crore on Idea.Tuesday’s order came after a two-member bench of the tribunal gave a split verdict on the matter in 2012.While the department said the arrangements amounted to sharing of spectrum, which at that time was forbidden, the telecom operators contended the agreements were simply intra-circle roaming arrangements.The government’s main opposition was to the operators selling 3G services in areas where they didn’t have airwaves or permits. To be able to enter into such intra-circle pacts, the government said operators must possess the right to use airwaves in that particular bandwidth in that specific circle.In this case, it said operators who hadn’t won any spectrum in a particular circle were riding on the waves of another operator without the permit to deliver 3G services. Hence this amounted to sharing and not roaming, according to the government.To be sure, the operators have in the past found support from the telecom regulator with its chairman saying that in the absence of adequate spectrum to offer data services, the telecom operators didn’t have any other option.Meanwhile, on Monday, Reliance Communications signed 3G roaming agreements with Tata Teleservices and Aircel. A person with knowledge of the matter had said at the time that the pacts didn’t allow RCOM to sell its services in circles where it didn’t have airwaves. After the TDSAT order, the same person said the companies could now broaden their agreements to sell services in each other’s licence areas.Tata Teleservices and Aircel had signed 3G sharing pacts in 2011, but had called off their agreement after DoT issued notice to them. Welcoming the judgment, Hemant Joshi, a partner at Deloitte Haskins & Sells, said the decision would allow proliferation of 3G services across the nation and the move would benefit subscribers.