COAI questions Virgin’s ‘backdoor’ entry, seeks clear policy

March 20th, 2008 - 8:40 pm ICT by admin  

New Delhi, March 20 (IANS) Opposing the Virgin Group’s entry into mobile virtual network operators (MVNO) services in India, leading cell phone service operators of the dominant GSM technology have urged authorities to clarify the policy in this regards. The operators, under the aegis of the Cellular Operators Association of India (COAI), have raised questions about the validity of MVNO services launched here by Britain’s Virgin Mobile in partnership with Tata Teleservices.

“Virgin Mobile India Private Limited claims that these are the ‘Virgin Mobile’ services of Tata Teleservices Ltd. and Tata Teleservices Maharashtra Ltd., and that it is offering these services only as a franchisee,” COAI said in a letter to Siddhartha Behura, Secretary of the Department of Telecommunications (DoT).

“The launch of these services and the so-called franchising arrangement being used to roll out these services emphasizes the need for clarity on the regulations applicable to MVNOs,” it added.

MVNOs buy airtime from mobile players and sell it under their own brand name. While it is the operator that builds and operates the networks, the MVNO kooks after marketing, branding and customer care.

Globally, MVNOs provide mobile voice and data services without owning the access rights to spectrum or airtime. The radio capacity used to provide these services is gained through commercial agreements with licensed mobile network operators.

Current Indian telecom laws do not allow MVNOs to operate and a policy on this would require guidelines from the regulator and government.

“Backdoor methods which have the effect of subverting the policy must be avoided, there should be no double standards, and the policy should be clear to one and all,” the COAI said, adding that it favours such a policy which must also ensure a level-playing field.

COAI director general T.V. Ramachandran said: “It is equally well known that the mobile services that have been launched in India by Virgin Mobile India are the same services that the Virgin Group already offers, as an MVNO, in other parts of the world under the same brand.”

“It is counter-intuitive that a group with a well-known brand of mobile services would first transfer its brand and expertise to Tata Teleservices and then take the same brand and expertise back for use in India under a franchising arrangement, unless this double loop is deployed to overcome a regulation,” he highlighted.

“We suspect that going by the concept of franchising as understood worldwide, it is Tata Teleservices that may in fact be acting as a franchisee of the Virgin Group for use of the Virgin Mobile brand and business format expertise in India, instead of the other way round.”

Meanwhile, Minister of State for Communication and IT Shakeel Ahmed told the Rajya Sabha Thursday: “MVNO is a new kind of service… the government is required to seek recommendations of TRAI (Telecom Regulatory Authority of India) on need and timing for introduction of new service providers and regarding terms and conditions of license to be granted to such service providers.

“As on date, no decision in this regard has been taken by the government.”

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