New Delhi: The department of telecommunications (DoT) is willing to allow mobile virtual network operators (MVNO) such as Virgin Mobile Telecoms Ltd to operate in India, after it examines the legal and regulatory issues involved.
An MVNO is a company that provides a branded telecom service without owning any of the infrastructure required to do so. It partners with another company, or other companies that own such infrastructure.
“We are open to allowing MVNOs in the country and will take a call soon,” Siddhartha Behura, secretary, DoT, told reporters on the sidelines of a conference here on Wednesday. “The Tata-Virgin service can proceed for a commercial launch in the meanwhile; we have only asked them to clarify certain objections raised by other operators.”
British billionaire Richard Branson, who launched Virgin Mobile in India with the Tata group on Sunday, said his company would target India’s young and affluent mobile users and offer phone services in 1,000 Indian cities by December 2008.
While both Tata Teleservices Ltd and Virgin Mobile maintain that their alliance in India is only a brand-franchisee agreement, the Cellular Operators Association of India (COAI), which represents mobile phone firms in the country such as Bharti Airtel Ltd and Vodafone Essar Ltd, said the Tata-Virgin alliance breached existing regulations that do not explicitly allow MVNOs to operate here.
“How can Virgin talk about offering 10 paise credit for incoming calls without any control on airtime? This is an MVNO agreement in disguise,” said T.V. Ramachandran, secretary general of COAI. India is the world’s fastest growing mobile market and sees the addition of more than eight million users every month.
“Our agreement with Virgin Group is very much in line with the licence conditions and it does not involve the selling of bulk airtime—hence its not an MVNO,” said a Tata Teleservices spokesperson.
Typically, an MVNO would buy airtime in bulk from a telco and resell it to subscribers under its own brand.
In the US and Canada, Virgin runs MVNO operations.
Virgin Mobile USA Inc., a joint venture between the Virgin Group and US’ third biggest wireless operator, Sprint Nextel Corp., was launched in 2002 and serves around five million Americans, primarily between the ages of 14 and 34 years. In 2004, the Virgin Group and Bell Mobility formed Virgin Mobile Canada.