The Hindu Business Line : DoT okay with Tata-Virgin deal

New Delhi, March 5 Putting to rest doubts over the deal between Tata Teleservices and Virgin Mobile, the Department of Telecom on Wednesday said that the Government had no problems with the partnership. The DoT also added that it was open to allowing Mobile Virtual Network Operators (MVNO) in the country.

“We have just asked for some information (from Tatas) in view of the fact that some people had approached us. We will not scrutinise or vet the deal. We are also open to MVNO. Indian telecom market is maturing and this can be allowed,” said Mr Siddartha Behura, Secretary, Department of Telecom.

Tatas’ tie-up with Virgin Mobile for offering branded cellular services was questioned by GSM operators on the grounds that the joint venture deal was an MVNO. MVNOs buy airtime in bulk from traditional mobile operators and sell packaged plans under their own brands. Virgin Mobile operates in most other countries as an MVNO though in India Tatas insist that the partnership is of a different nature.

Currently, MVNOs are not permitted in the country. But if the DoT permits MVNOs to start offering services in the country, a number of companies including BT, Spice and some of the new players may enter the fray. MVNO route allows new entrants to become pan-Indian operators from day one without owning any infrastructure or spectrum. However, in India, where almost all the operators are facing spectrum crunch, it will be interesting to see how anyone can share it with MVNOs.

COAI letters

Though the Tatas had made it clear that the alliance with Virgin was not MVNO, the Cellular Operators Association of India wrote two letters to the DoT seeking a probe into the agreement to verify the nature of the partnership.

“It may be appreciated that in the event that the company is acting/operating as a franchisee of Tata Teleservices, then its services can be retailed only under the Tata Indicom brand. It is evident from the launch presentation, that this is not the case. We would deeply appreciate if you could kindly look into this matter and clarify as to in what capacity Virgin Mobile is entering the Indian market and the terms and conditions thereof,” COAI had told the DoT.

Tatas reply

Tatas said it was only a franchise agreement between the two companies and no clause of the telecom licence has been violated as alleged by COAI. While the controversy may have been put to rest for now, it has got the Government to review its policy on allowing MVNOs. “Some of the operators have sought clarifications about the MVNO and we are looking into it,” Mr Behura said.