Trai Seeks Industries' Views On Mvno

[@ksh@T 20]

NEW DELHI: Telecom regulator TRAI on Monday sought views from the industry and other stakeholders on Mobile Virtual Network Operator, a service that came to prominence following the launch of Virgin Mobile.

The debate on MVNO started after Richard Branson-run Virgin Group entered country's mobile services market in collaboration with Tata Teleservices.

Following which GSM operators' lobby COAI seeked clarification from Department of Telecom (DoT) over Virgin Group's entry into India.

COAI had alleged that the tie-up was nothing but entry of Virgin as MVNO, but Virgin Group and Tata Teleservices have been denying this. Following this, DoT had asked Trai to suggest a policy framework for introducing MVNO in the country.

"MVNO licensee is an entity that does not have assignment of spectrum for Access Services (2G/3G/BWA) but can provide wireless (mobile) Access Services to customers by sharing the spectrum of the Access Provider (UAS/ CMTS licensee)," TRAI said in a statement.

MVNOs offer mobile services to the subscribers generally under its own brand name and operate through commercial arrangements with licensed Mobile Network Operator (MNO) buying bulk minutes of traffic and reselling them to their own subscribers.

The main difference between a franchisee and MVNO is that MVNOs add value to the service and offer differentiated service to niche market segments. MNVOs do not have their own spectrum. They share spectrum of the parent MNO.

[Honest 836]

Allow mobile virtual network ops: TRAI

6 Aug, 2008, 1326 hrs IST, ET

NEW DELHI: Telecom regulator has recommended to the government to allow mobile virtual network operators (MVNO) in the world's fastest-growing wireless market.

The Telecom Regulatory Authority of India said in a statement on Wednesday the licence fee for virtual network operators would be the same as that paid by current mobile operators. MVNOs do not have spectrum or airwaves of their own, but provide mobile services to customers through an agreement with the licensed mobile operators.

[Honest 836]

TRAI seeks separate license, 74% FDI for MVNOs

6 Aug, 2008, 1626 hrs IST, PTI

NEW DELHI: Telecom regulator TRAI today opened the door for 'Mobile Virtual Network Operator,' under which a separate licence is to be issued to operators who do not have their own spectrum for offering mobile service but have a tie- up with an existing player to do so.

A telecom analyst said if these recommendations are accepted by DoT, this could well solve the acute spectrum crunch problem in the country and at the same time mobile services could be offered without disruptions.

The move is well-timed, the analyst said. TRAI has sought to introduce MVNO as a distinct service provider with its own licensing and regulatory framework. Accordingly, MVNOs are to be issued a license under the Indian Telegraph Act.

There is no roll-out obligation for MVNOs and the FDI limit is 74 per cent, which is same as a Mobile Network Operator (MNO). The Arrangement/agreement between MNO and MVNO would be driven by market forces and therefore no regulatory diktat is required and there is no limit on number of MVNOs attached to an MNO.

But the agreement with MNO has to be submitted before issuance of license to MVNO by DoT. Also, it is the MNO who would pay charges for utilisation of spectrum by the MVNO.

The entry fees for MVNOs are 10 per cent of MNOs subject to a maximum of Rs 5 crore for Metro/Category A, Rs 3 crore for Category B and Rs 1 crore for Category C service areas.

The annual licence fees are same as that of MNO of the service area. Allocation of Numbers, Number portability, Interconnection with other service providers and Roaming are to provided by parent MNO and subscribers to be protected for failure of agreement between MNO and MVNO or MVNO quitting service, TRAI said.

[Arun 795]

Virtual mobile networks set to enter India

Business Standard

August 07, 2008 02:58 IST

Mobile users can expect a sharp fall in tariffs and access to a range of sophisticated services if the government accepts recommendations by the Telecom Regulatory Authority of India to permit mobile virtual network operators.

MVNOs do not own spectrum, the radio frequencies that enable wireless communications, but can provide mobile services by leasing or buying capacity from mobile licensees.

The move is expected to bring in a bevy of new international and Indian players in the mobile space that could drive down tariffs even more.

Reliance Communications [Get Quote], for instance, has held preliminary talks with France Telecom to offer Orange MVNO services in India. With RCom rolling out a pan-Indian GSM network, it is expected to have sufficient surplus capacity to lease out to MVNO operators.

Subhash Chandra's Essel group might be first off the block. "Now with the policy we will explore an association with service providers and handset manufacturers," said Ishwar Jha, CEO, Digital Media Convergence, a part of the Essel group.

Sources said the Essel group is in talks with BSNL to offer an MVNO service that will offer entertainment information on the mobile.

Broadcasting companies like ESPN, Star TV, Disney and MTV, which have a presence in the MVNO space globally offering niche services, might tap the opportunity in India too.

"TRAI's recommendations open a whole new opportunity to offer differentiated services and options for Indian consumers," said Viren Popli, senior vice-president, Star Mobile Entertainment.

Virgin Mobile, the world's largest MVNO, already offers youth-targeted services through a marketing tie-up with a Tata group company and is expected to convert itself into an MVNO once the policy is approved. The company declined to comment

Earlier this year, the tie-up came under attack from GSM operators who alleged that Virgin was making a backdoor entry into the country when MVNO policy was not in place.

Incumbent operators, however, are sceptical about the entrance of MVNO. "This model was successful abroad mainly because there were two or three players and the average revenue per user was high, so they could still make margins," said T V Ramachandran, Director General, Cellular Operators Association of India.

"But operators like Bharti Airtel, Vodafone and Idea Cellular will undercut MVNOs' business," he added.

Ramachandran also doubted whether players will have surplus capacity to lease.

[Sadikk 301]

Already existing operator not getting enough spectrum, they talking about MVNOs.

Greedy indian telecom department.

They charge bomb for license and let the consumer suffer lame services.

[Honest 836]

TRAI nod for mobile virtual network operators

7 Aug, 2008, 1430 hrs IST, ET Bureau

NEW DELHI: In a move expected to increase competition in the world’s fastest growing mobile market, telecom regulator TRAI on Wednesday asked the government to allow Mobile Virtual Network Operators (MVNOs), whose business model involves buying air time from existing operators and then selling it under their own brand, to launch services in India.

This will enable firms to allow to offer mobile services without owning cellular networks (radio frequencies).

Companies such as the UK’s Virgin and BT Mobile and Japan’s KDDI have based their telecom strategy on the MVNO model. At present, there are 360 MVNOs operating globally.

TRAI has recommended that entry fee for MVNOs be fixed at a maximum of Rs 5 crore for Metro/Category A, Rs 3 crore for Category B and Rs 1 crore for Category C service areas.

This implies that an MVNO will have to pay a maximum of Rs 75 crore for launching nationwide MVNO services in comparison to the Rs 1,651-crore entry fee paid by an operator who sets up its own physical network throughout the country.

TRAI’s recommendations, which stand a good chance of being accepted by the government, will have major implications. First, global telecom majors who missed the India growth story can get a second chance to enter the country via the MVNO route. An entry into the country as a virtual operator will help save the time it takes to set up physical networks across the country.

Besides, it will enable them to roll out services in specific zones, like say only in the metros and large cities, and focus on particular segments of the population. Second, with the government unveiling the roadmap for the introduction of high-end services on mobile (also called 3G), MVNOs can selectively offer high-end services in this space.

Globally, the MVNO model has experienced phenomenal growth in the 3G space, as such players are able to connect with end users through highly specialised value-added services and superior branding.

Analysts also say that this model could help accommodate several new operators in the country without aggravating the severe spectrum crunch in the country. Also, some of the new entrants have been granted licences only for a few circles and can now expand to the rest of India using this model.

For the time being, however, existing telcos are confident that MVNOs will not pose a threat to them. “MVNOs are successful in markets where there are few players and high tariffs. But in a country like ours where there are so many operators, rock-bottom tariffs, and a wide range of services, MVNOs may not have a USP. It will not be easy to undercut large operators such as Bharti, Vodafone and RCOM on the price front as they have large economies of scale,” says TV Ramachandran, the director general of COAI, the industry body of GSM operators.

TRAI feels that MVNO will enhance free market principles and contribute to the efficient use of existing telecommunication infrastructure.

“The introduction of MVNO should help the MNO (mobile network operator) to widen and deepen its market besides promoting competition in the market. The challenge is to optimally utilise available resources while ensuring competition and availability of services at affordable price,” TRAI said while announcing its recommendations on the issue.

TRAI, in its recommendations said that MVNOs should be issued separate licences and the foreign holding for players in this should be at 74%, on par with existing telecom operators in India. “Any Indian company having a net worth of Rs 10 crore for Metro/Category A, Rs 5 crore for Category B and Rs 3 crore for Category C service area, paid-up capital of 10% of prescribed networth and satisfying licence conditions such as FDI, substantial equity should be eligible to apply for MVNO licence,” TRAI added.

The regulator has also proposed that existing players be allowed to enter into tie-ups with any number of MVNOs, adding that virtual operators should not be given any rollout obligations. TRAI wants MVNOs to be subject to the same revenue share licence fee as that of the existing players. At the same time, MVNOs will have to pay spectrum charges to the operator whose network they use.

The regulator said that MVNOs should be free to choose any business model, full, intermediate or thin. Typically, a ‘thin’ MVNO would offer services in its own brand without any infrastructure while a ‘full’ MVNO sets up its own HLR, VLR, IN switches, MSC etc., but not the radio access network (RAN).

TRAI also does not want the government to intervene in the agreement between the MVNO and the operators whose network it is riding on. All issues such as the allocation of numbers, number portability, interconnection with other service providers and roaming must be provided by parent operator whose network the MVNO uses, TRAI added.

Interestingly, in a bid to protect subscribers’ interest, TRAI said that the MVNO and the parent operator should have an agreement in place to safeguard the customers if either of stakeholders were to pull out of the deal.

All current merger and acquisition norms will apply to MVNOs. Industry watchers say this may act as a deterrent to MVNOs entering India as the regulations are structured against virtual operators. This is because, globally, MVNOs often pick up small equity stakes in the networks of operators they use.

If an MVNO were to use the networks of multiple players here and intends to pick have an equity stake, it is a difficult proposition as current Indian regulations do not allow a company to hold more than 10% stake in different telcos. Similarly, if many existing Indian operators or even one of them want to pick up stake in an MVNO, the same regulation applies.

According to Indian Cellular Association national president Pankaj Mahendroo, the entry of MVNOs could promote bundling of handsets with cellular connections as operators would look into tapping into niche markets. He also added that MVNOs could lead to improved sales volumes for high-end product categories like music phones and internet-enabled phones.

For India’s regional operators, MVNOs may enable them to gain additional revenues additional revenues and contribute towards the creation of sizable capital value. This will be a boon for the smaller players especially since margins in India are razor-thin and tariffs are the lowest in the world.

[ravi_patent 28]

http://www.business-standard.com/india/new...s/05/36/344169/

The government expects to come out with the mobile virtual network operator (MVNO) policy by January 5, when the auction of 3G spectrum commences.Addressing the pre-bid conference for auction of 3G and BWA spectrum, Department of Telecommunications (DoT) Joint Secretary JS Deepak said, “We are hoping to come out with the policy on MVNO before the end of January 5, which is the deadline for (the) application of 3G spectrum.”

He added a sub-committee of the DoT was looking at it.

As MVNOs do not have spectrum, they operate through commercial arrangements with licensed mobile network operators, buying bulk minutes of traffic and reselling them to their own subscribers.

[shrik 9]

NEW DELHI: The real gamechanger in NTP 2011, hidden away in the fine print, is a commitment by the government to permit voice resale at both wholesale and retail levels.

For example, in the future, operators like Bharti Airtelwill be permitted to appoint resellers who will buy bulk minutes from Bharti at a wholesale price and resell them under their own or a joint brand to the end-user . This can be particularly useful to drive teledensity targets in rural India. The reseller will not need to invest in infrastructure as is the case with the MVNO(mobile virtual network operators) model. Currently this is prohibited.

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