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Videocon will use the MVNO route to continue telecom operations: report

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Videocon Telecom is in talks with multiple telecom operators to buy spectrum and re-sell it to provide telecom services via the MVNO route, according to this PTI report. The company is apparently in “final stages of applying” for an MVNO license and would submit one in a week, the report added. MediaNama has written to Videocon for a confirmation and will update the story when we hear back from them.

Videocon’s telecom business operation has been on a standstill mode, and it recently sold its 1800MHz spectrum in 6 circles to Bharti Airtel for about Rs 4428 crore in May this year. The deal between Airtel and Videocon was originally announced in March after Idea Cellular had called off an earlier deal with Videocon for the same spectrum.

Why Videocon is taking the MVNO route

The company has been planning to debut its 4G operations in circles like Punjab, Haryana, Gujarat and Madhya Pradesh circles, since last year. It also had said that it would be rolling out 4G services in in Uttar Pradesh East, Uttar Pradesh West and Bihar telecom circles in 2015, though no specific date had been revealed.

But is seems like Videocon has put these plans on hold and instead launch 3G/4G services via the MVNO route in the country. The report quoted Videocon Telecom CEO Arvind Bali who said that “One of the key reasons for us to exit the mobile telecom space earlier was us being predominantly a 2G player and hence being technologically outdated. The telecom space in India and worldwide is fast adopting to newer technologies i.e. 4G.”

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Bali had said in December last year that they had shelved 4G plans due to poor acceptability of the service launched by other telcos. Instead, they had upgraded Videocon’s 2G network to 2.75G EDGE network. This apparently has helped it to compete in market against existing telcos offering 3G services, and Bali added that “The two key factors that we feel will be strong for our comeback will be us able to provide 4G/3G data to our customers, which was earlier a limitation for us, and hence we never had a level playing field with others.”

Plans to launch 4G in Punjab: Bali was further quoted in the report saying that Videocon’s initial focus while rolling out 4G (in a phased manner in the future) would be in the Punjab circle, where it claims to own almost 10% market share with around 3 million subscribers.

70 companies have already applied for MVNO license

 The DoT had received more than 70 applications from companies in the country for acquiring an MVNO license, according to a Zee Business last month. Some of the companies which have applied include tablet device manufacturer DataWind and Kishore Biyani owned retail giant FutureGroup.

Nikhil adds: At an event a couple of weeks ago, a DoT official mentioned that while VNOs need to buy access services (sms, voice) from a single operator in a circle, but they can get data by tying up with multiple operators. Our assessment, when the VNO license was announced, was that data would be seen as an access service, which it appears was incorrect. More here.

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