Mobile virtual network operators not viable in India: Mittal

April 7th, 2008 - 7:35 pm ICT by admin  

New Delhi, April 7 (IANS) The concept of mobile virtual network operator (MVNO) is not viable in the Indian telecom space due to cheap call tariffs, Bharti Airtel chief Sunil B. Mittal said Monday. “I don’t think MVNOs can succeed at the current rates,” Mittal, Bharti Group chairman and managing director, told reporters on the sidelines of a conference here by the Confederation of Indian Industry (CII).

He also said that the Telecommunications Regulatory Authority of India (TRAI) should initiate a consultation process for allowing MVNOs in India.

MVNOs buy airtime from telecom operators and sell it under their own brand name. While it is the operator that builds and runs the network, the MVNO looks 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 the government.

According to industry sources, the Department of Telecommunications (DoT) has asked TRAI to initiate consultations among all stakeholders to study the viability of allowing MVNOs.

The regulator is expected to send its recommendations to the DoT within the next three-four weeks after which a final policy is expected by the end of the year, said the sources.

The debate started after Mumbai-based Tata Teleservices last month entered into a partnership with Britain’s Virgin Mobile to offer value-added services.

Other operators termed this as a “backdoor entry”, and have urged the government to clarify on the partnership as it was on the lines of a MVNO.

“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 Cellular Operators Association of India (COAI) said in a letter to DoT last month.

India is the world’s fastest growing market for wireless subscribers, adding more than eight million users a month. With some 251 million wireless users it is expected to surpass the US as the world’s second-biggest market, led by China.

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