ravi_patent 28 Report post Posted May 30, 2009 http://economictimes.indiatimes.com/News-b...how/4595463.cms The Telecom Commission, the highest decision making body of the communications ministry, on Thursday cleared the proposal to allow mobile virtual network operators (MVNOs) to launch operations in India. MVNOs offer mobile services without owning cellular networks or airwaves (spectrum) on which telecom signals travel. Their business model involves buying airtime from existing operators that own telecom infrastructure and selling it to consumers under their own brand. Companies, such as the UK-based Virgin Mobile, British Telecom and Japan’s KDDI, have based their telecom strategy on MVNO model. Currently, there are over 300 MVNOs operating globally. The entry of MVNOs is set to further increase competition in the world’s fastest growing mobile market. Following the commission’s approval, the government will soon issue a formal notification along with guidelines for MVNOs to operate in India. In August 2008, Trai asked the government to permit MVNOs and said that entry of such players would be a ‘natural progression towards enhancing free market principles and contributing to the efficient use of existing telecommunication infrastructure’. So far, the communications ministry had been unable to release the guidelines for MNVOs, as the department of telecom (DoT) and regulator Trai had not found consensus on key issues. The commission, while clearing the proposal, has said MVNOs cannot go for multiple parenting in India. This means, an MVNO can tie-up with only an operator in an area for their services. On the other hand, an existing operator can tie-up with any number of MVNOs. The commission also said that MVNOs would be given licences for a 20-year period. DoT executives had earlier told ET that several MVNOs from across the world had shown interest in launching operations in India. The auctions of 3G spectrum and the launch of these high-end services is expected to serve as a catalyst and attract virtual operators to India, as many players that operate in this space globally specialise in high-end value-added services. Many of the new telecom companies, who were granted telecom licences last year, may partner with MVNOs, as it would bring them additional revenues and help contribute towards the creation of sizeable capital value especially in a sector where margins are razor-thin and further reduction of tariffs is not feasible. Share this post Link to post Share on other sites
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