MVNOs can’t own spectrum: Trai

New Delhi: Chairman of the Telecom Regulatory Authority of India (TRAI) Nripendra Misra has categorically stated that 'mobile virtual network operators' (MVNOs) will not be allowed to own any spectrum.

Misra was speaking to the media along the sidelines of an open house on MVNO, and added that there would be a lock-in period for an MVNO, along with a security amount that could be forfeited if the company plans to exit the business before the stipulated lock-in period ends.

TRAI's earlier definition in its consultation paper on MVNOs, had defined an MVNO as ''an entity that does not have an assignment of spectrum for 'access services' (2G/3G/BWA) but can provide wireless (mobile) access services to customers by sharing the spectrum of the access provider''. In response, TRAI had to face opposition from two of India's largest telecom service providers, Bharti Airtel and Reliance Communications, along with state-owned BSNL asking for clarifications.

International MVNO definitions are silent on spectrum sharing and Airtel, RCOMM and BSNL had asked TRAI to clearly specify that an MVNO would not have its own radio frequency.

The telecom companies had contended that an MVNO with spectrum would no longer be a 'virtual network operator', and would have to be reclassified as a facility based mobile network operator (MNO), which cannot be distinguished from a Unified Access Service Provider. Presently, TRAI's nod allows only infrastructure sharing amongst service providers.

Worldwide, MVNOs purchase air-time on a wholesale basis from the mobile network operators (MNOs), and then use it to provide their own branded services to customers. Multinational telecom companies such as British Telecom (BT), France Telecom and Verizon were reported to be pushing for spectrum sharing to make the MVNO business more attractive.