Real Reason for 3G Roaming Mess

5:00 PM -- The inevitable has finally happened. The Government has decided to stop 3G roaming pacts, according to The Economic Times. (See IndiaWatch: 3G Roaming Might Cost the Carriers and 3G Roaming: Win-Win Deal Is Needed.)

But why is there so much fuss about roaming pacts? Simple. There is a strong link between 3G roaming pacts and the upcoming BWA (Broadband Wireless Access) sector, which is set to take off with initial LTE TDD services in 2012. If 3G roaming was allowed, it would have paved the way for LTE deals as well. (See RIL Prepares Phase II of LTE Trials and Rumor: Bharti Plans LTE Soft Launch in 4 Cities.)

It goes back to the war between Bharti Airtel Ltd.'s Sunil Bharti Mittal and Reliance Industries Ltd. (RIL)'s Mukesh Ambani. The latter has a pan-India BWA license, while arch rival Airtel owns spectrum in only four circles. This means that Ambani would have a critical advantage over the other owners of the BWA spectrum, specifically Airtel.

With its reach, incumbent advantage and existing brand equity, Bharti would have easily got the first mover advantage to capture the market if roaming pacts with other players were allowed. Now, it looks set to go to market at a disadvantage.

So, 3G roaming pacts are not so much about 3G but about the LTE TDD market. The stakes are high and the first mover advantage is going to be critical. (See .)

The coming year is going to witness some more exciting action between the arch rivals as they get ready to slug it out in the BWA/LTE services market.

Gagandeep Kaur, Editor, Light Reading India