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DoT Accepts TRAI Recommendations On MVNOs In India; Who Has The Spectrum?

(By Preethi J & Nikhil Pahwa)

Update: December 5th 2009 – A TRAI representative, responding to a question from MediaNama on the delay in launch of MVNO services in India, clarified that the DoT has only accepted the TRAI recommendations. It has not issued detailed guidelines. This means that MVNOs have not been given the go-ahead in India, and the policy is in a state of limbo. Our apologies for the misinterpretation of the TRAI document.

Earlier: India’s Department of Telecommunications (DoT) has now permitted mobile virtual network operators to launch their services in India. The DoT accepted regulator Telecom Regulatory Authority of India’s (TRAI) recommendations sent six months ago in a curt press release issued yesterday. There are, apparently, some issues, that the DoT is awaiting a response to – following which they will issue detailed guidelines. The Telegraph reports that this could be in the next 10 to 15 days.

The decision has opened the gates to India’s telecom market, allowing foreign and Indian firms to set up telcos almost instantly without needing to buy costly spectrum. MVNOs can buy air time from other licensed operators now.

Low Barrier To Entry

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New entrants who have been granted licences only for a few circles can now buy coverage in other circles using the MVNO model, rolling out services faster.  As per the TRAI guidelines, for a pan-India license, companies were supposed to pay Rs. 70 crores. With Inter and Intra Circle roaming allowed, we wonder if some of the new telecom operators feel they paid too much (Rs. 1650 crores) for a license. More the TRAI recommendations and license conditions here.

But Who Has The Spectrum?

The call-drop situation has been worsening over the past few months, and we’re wondering about who really has the spectrum for giving to an MVNO. Perhaps the situation might improve if the defence forces release spectrum, but it’s likely that it will mostly be used by operators for their own operations, rather than leasing it out to an MVNO.

At the same time, telecom operators like Tata Teleservices have the spectrum for a “franchise agreement” with Virgin Mobile, but how is Virgin Mobile doing anyway?

Potential MVNOs In India

One aspiring MVNO is Virgin Mobile India, the operator with the ‘Get Paid for Incoming Calls‘ ad. Virgin Mobile tied up with Tata Teleservices as a ‘franchisee’ when India did not allow MVNOs, sparking accusations of it sneaking a ‘backdoor entry’ and subverting the policy. Read our post on the Virgin Mobile-TataTeleservices tie up on Medianama. Virgin expects revenues from West Bengal to increase to 14 percent from around 10 per cent right now, as it plans to expand in the region, according to Business Standard. FutureGroup also has plans to enter the telecom field as an MVNO, reports Reuters. In India, Reliance has also received offers and is waiting for guidelines to be finalised, according to Go Broadband.

Related

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What Indian Mobile Operators Want From Their MVNOs
“We Are Just Operating And Managing The Brand Virgin Mobile For Tata Teleservices” – Virgin Mobile CEO
Virgin Mobile Brand In India Belongs To Us, Says Tata Teleservices
TRAI Recommends 20 Yr License, 74% FDI For MVNOs In India; Favours Telecom Operators

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