The decks have been cleared for yet another telecom reform. The Telecom Regulatory Authority of India (Trai) on Wednesday gave its green signal to the mobile virtual network operator (MVNO) model.
Once accepted by the department of telecommunications (DoT), the licensed telecom service providers can resell their spectrum to MVNOs, who would then provide direct services to consumers, like Virgin Mobile does now under a different setup. However, to operate as an MVNO, a separate licence would be required.
The move would lead to many more players entering the telecom space, leading to greater competition, lower tariffs and deeper tele-density.
There are over 360 direct and indirect MVNOs worldwide.
MVNOs entry would help unified access service licence (UASL) holders?like, say, Bharti?to use their spectrum more efficiently. Typically, the licence holders, who are the mobile network operators (MNOs), would enter into agreements with MVNOs, who would buy bulk talk airtime from the MNOs and brand it under a new name and sell to the end-consumer. The billing in such cases would be under the MVNOs brand name.
Trai clearly specifies that MVNOs would not have any spectrum of their own but would simply pay the service provider for using the spectrum.
The definition also leaves the Tata Teleservices Ltd’s arrangement with UK?s Virgin Mobile out of the purview of an MVNO. TTSL has entered into a franchise arrangement with Virgin wherein the billing and subscribers are under TTSL.
According to Trai recommendations, any Indian company can apply for an MVNO licence if it has a net worth of Rs 10 crore for Metro/ Category A, Rs 5 crore for Category B and Rs 3 crore for Category C service area, with a paid-up capital of 10% of the prescribed net worth and satisfies the licence conditions on FDI and the like.
An MVNO would be free to choose its business model. Typically, a thin MVNO would offer services under its own brand without any infrastructure and a full MVNO could set up its own HLR, VLR, IN switches, MSC etc, but not the radio access network.
The service area of an MVNO would be the same as its parent MNO?s. There would be no limit on the number of MVNOs attached to an MNO.
BSNL IPO gets go ahead
The government has decided to go ahead with the IPO of Bharat Sanchar Nigam Ltd ( BSNL). Comunications & IT minister A Raja is scheduled to meet the BSNL unions on Thursday to convince them that the move would not jeopardise either their jobs or the growth of state-owned company. Raja is expected to announce the IPO plans. Earlier, to win over the recalcitrant unions, DoT officials have said the government is willing to offer an employee stock option, or Esop. However, the unions continue to oppose an IPO, stating that the company can grow without it.
Union general secretary VAN Namboodiri said, ?We are opposing the IPO, as we feel the expansion of BSNL can happen without it and we are not going to change our stand.? The BSNl board has proposed to sell 10% of the government?s 100% stake in the company through an initial public offering.