The Future Group is set to launch telecom services, maybe as an MVNO, according to the Hindu. However, we wonder if the Future Group is getting a little ahead of itself: the Indian governments policy on MVNOs in India still isn’t final. The Department of Telecom has accepted the TRAIs recommendations, but no decision has been taken yet, a TRAI official had told MediaNama during the Q&A at India Telecom 2009 last month. Media reports have named applicants for licenses, but one of the applicants named in the report told us today that there is no license yet to apply for, and were surprised at being named in that list. Nokia and Ericsson had also denied MVNO plans. The Future Group has a presence in retail, capital, consumer finance, insurance, media and entertainment, e-commerce, among several others.

Is Future Group Chairman Kishore Biyani’s stated timeline of ‘being ready’ within six to eight weeks an indication that the policy may be finalized, and license awarded soon? Or that the Future Group will take the franchise route? So far, only franchise models for telecom partnerships exist, involving the formation of a joint venture between the telecom operator and the franchisee. Virgin Mobile has a similar agreement with Tata Teleservices. The MVNO policy in India has been in a state of limbo (or ping-pong) for the last year and a half.

But policy matters aside, we wonder why the company is looking to enter the telecom space when the market appears to be spiraling out of control: Indian telecom tariffs are the lowest in the world, with new lows being explored every month. Tata DoCoMo recently launched BuddyNet which reduces tariff for a group of friends to 1 paisa per 6 sec on all local calls and 1 paisa per 2 sec on all STD calls. ARPUs have dropped and are expected to continue dropping. There is a fear that the total number of mobile consumers in India is being overstated by around 100 million, and growth in numbers isn’t really as spectacular as has been reported.

The approach that the Future Group will take should be interesting: Tata DoCoMo appears to have stolen Virgin Mobile’s thunder, targeting the youth market, and we’re not shore if that’s a high ARPU bet anyway. What do you think the Future Group will do?

Related:

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