Out of the 61 companies that received approval for a Virtual Network Operator (VNO) from the DoT this month, a majority of the VNO licenses were awarded to companies in Tier-2&3 cities as such as Surat, Ahmedabad, and Vadodara, Rajkot, Kanpur, Agra among others. Companies from metro cities including Mumbai and Delhi followed closely. In October last year, DoT had issued letter of intent to these companies who applied for an MVNO license.

Interestingly, Chennai-based Adpay Mobile Payment India Private Limited, Japan’s NTT Communications, and Kolkata-based Microtalk Communications were the only companies who received a pan-India ISP license under the VNO regime. MVNOs with a pan-India ISP license can provide broadband and fiber Internet services. Note that pan-India ISP license costs Rs 15 lakhs. Adpay runs an MVNO named Aerovoyce in Chennai, which was launched commercially last month. NTT Communications said that it will use the VNO license to provide enterprise services only.

MediaNama talked to Aerovoyce’s CEO Sivakumar last month, and according to him, Aerovoyce will focus on the untapped rural market and slowly move on to the more competitive urban market in the future. DoT’s recent VNO list also suggests a similar pattern among other VNOs, since most of the licensees (companies who received a VNO license) come from Tier-2 and 3 cities when compared to metro cities.

Entry Fee, Bank Guarantee and Guidelines

A company can acquire an MVNO license in India under the Unified License agreement. The entry fee costs anywhere between Rs 5 lakhs to Rs 7.5 crore depending on the area that a company is looking to cover—pan-India, per circle, and per district. For e.g. players looking to offer ‘all services’ including internet, and voice on a pan-India basis will have to shell out Rs 7.5 crore as entry fee, and Rs 10 crore as minimum net worth. On the lower end, players looking to offer data and voice services on a per-circle basis will have to shell out Rs 5 lakh as an entry for each circle along with Rs 1 crore as minimum net worth.

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