Vodafone, RCom likely to sign 2G roaming deal

Vodafone and Reliance Communications (RCom) are likely to sign 2G intra-circle roaming agreements across five circles. The deal will enable RCom to continue its 2G service by using Vodafone's spectrum in Bihar, West Bengal and Assam. The two companies are also in advanced talks to share 3G spectrum in Delhi and Mumbai to reduce their operational expenses as well as improve the quality of service, according to an agency report. The agreement will be signed in line with 3G intra-circle roaming norms, which allow an operator in a circle to use a partner's 3G network to sell and operate the services. The 3G intra-circle agreement has been held valid by the Telecom Disputes Settlement and Appellate Tribunal, but the Department of Telecom has challenged it. In March, RCom failed to win back 900 Mhz spectrum it used for 2G mobile services in West Bengal, Bihar, Assam, Odisha and the north-east service areas, and the licence for 900 Mhz spectrum expired on December 12.

Recently, RCom had asked its customers to port out to other network in circles it does not own any spectrum.

RCom could not win back its 900 Mhz spectrum in West Bengal, Bihar, Assam, Odisha and the north-east service areas in the auction held earlier this year. Its right to use this spectrum had ended on December 12.

When contacted, a Vodafone India spokesperson said: "We are not commenting on this at the moment." An RCom spokesperson, too, declined to comment.

According to a Nokia Network report, Bihar and West Bengal have the lowest penetration of active 3G handsets as 2G services dominate. After signing the deal, RCom might retain its customers to provide connectivity on Vodafone's network without buying spectrum in the auction process.

It is not known how much will RCom pay Vodafone for this agreement. The Anil Ambani-controlled firm has been trying to revamp its business model by laying off some of its assets.

On December 4, RCom signed a non-binding pact to sell its mobile towers to private equity firm Tillman Global Holdings and TPG Asia at an estimated Rs 30,000 crore deal to pare debt. According to a recent report by brokerage firm CLSA, RCom's impending deal for tower asset sale would lower its consolidated debt by 60 per cent. RCom is also in the process of finalising a spectrum-sharing deal with Reliance Jio for its 800 MHz spectrum, which could unlock the value of its other assets.