New Delhi: The Telecom Regulatory Authority of India (Trai) has asked the government to allow firms to offer mobile services without owning a network or spectrum, which could increase competition and push already cheap call rates even lower.
Mobile Virtual Network Operators, or MVNOs, piggyback on the spectrum and networks of existing telecoms firms for a fee, and sell mobile services with enhanced content and applications. The model has become popular in mature telecoms markets, where virtual operators help the parent add subscribers. MVNOs would also help Indian firms facing an competitive market, Trai said.
Competitive: India is the fastest growing market for mobile services
“The challenge is to optimally utilize the available resources while ensuring competition and availability of services at affordable price,” the regulator recommended on Wednesday. “The introduction of MVNO should help the MNO (mobile network operator) to widen and deepen its market besides promoting competition in the market.”
There are currently about 360 planned or operational MVNOs worldwide, with countries in Europe and the US having the largest share.
Firms interested in operating as an MVNO in India would have to pay about Rs150 crore for a nationwide entry licence. Annual licence fees would be the same as those paid by mobile operators.
The regulator has recommended a foreign holding cap of 74% in MVNOs, in line with other telecom services. Mobile operators would be free to lease spectrum to as many MVNOs as they want, the regulator said.
The government has already said some firms interested in starting MVNO operations had approached it.
Virgin Mobile Llc., partly owned by Richard Branson’s Virgin Group, serves more than 5 million subscribers in the US as an MVNO, catering to cost-conscious, pre-paid consumers.
Branson recently tied up with Indian telecoms operator Tata Teleservices Ltd to launch youth-focused services in the country. Diversified Future Group has said it wants to enter into mobile services as an MVNO.
India is the world’s fastest growing market for mobile services with operators adding more than 8 million subscribers a month and is the second largest such market with a total of about 290 million mobile users.