TRAI suggests piggy-back entry for mobile virtual network operators

Mumbai: The Telecom Regulatory Authority of India (TRAI) has suggested issue of separate licences to `mobile virtual network operators' (MVNOs) who do not have separate radio spectrum allocated to them but have tie-up with mobile network operators.

MVNOs do not have radio spectrum of their own, but provide mobile services through licensed mobile operators. However, MVNOs will remain a distinct service provider.

TRAI has suggested the same licence fee for virtual network operators as that paid currently by mobile operators in the area. The licences should then comply with the Indian Telegraph Act, having separate regulatory framework.

The entry fee could be equivalent to 10 per cent of that paid by mobile network operators, subject to a maximum of Rs5 crore for metro/category A, Rs3 crore for category B and Rs1 crore for category C service areas.

Allocation of numbers, number portability, interconnection with other service providers and roaming are to provided by parent MNO and subscribers to be protected for failure of agreement between MNO and MVNO or MVNO quitting service, TRAI said.

There will not be any roll-out obligation for MVNOs and TRAI has kept the FDI limit at 74 per cent, the same as that of a mobile network operator (MNO).

The tie-up between a mobile service provider and mobile virtual network operator has to be market-driven and therefore, may not require any regulation as such, TRAI said in a statement.

The MNO would pay charges for utilisation of spectrum by the MVNO. However, the MVNO would have to submit the agreement with MNO before issuance of license by DoT.

"The challenge is to optimally utilise the available resources while ensuring competition and availability of services at affordable price," TRAI said, adding, ''The introduction of MVNO should help the MNO to widen and deepen its market besides promoting competition in the market."

The TRAI recommendations, if accepted by the department of telecom (DoT), mobile services in the country could be upgraded with enhanced content and applications despite the acute spectrum crunch in the country. This could also increase competition and push already cheap call rates even lower.

Mobile virtual network services, which are popular in mature telecom markets, help parent operators add subscribers.

There are about 360 planned or operational MVNOs worldwide, with countries in Europe and the US having the largest numbers, TRAI pointed out.

Richard Branson's Virgin Mobile LLC, which has teamed up with Tat Teleservices,  is likely to be the first MVNO. The Virgin Group company has over five million subscribers in the US, mostly to pre-paid consumers.