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India’s telecom space could get more competitive with global operators such as Lebara and Lycamobile looking to enter the mobile services market through the Mobile Virtual Network Operator (MVNO) route.
MVNOs do not have their own network infrastructure or spectrum. They lease capacity from traditional mobile operators at wholesale prices and then resell the talk-time and data packs to retail users under their own brand.
Globally, there are over 800 MVNOs but in India they have not been permitted so far. That could change soon with telecom regulator TRAI recently giving its recommendations to open up the MVNO space in India.
Lebara, which has operations in eight countries, with five million subscribers, is keen to initiate discussions with some Indian operators for a possible partnership.
Open to partnershipsWhen contacted, Lebara’s spokesperson said: “We constantly review MVNO opportunities in multiple geographies, including India. We engage with operators with whom we believe we can build a sustainable relationship. Lebara’s long-term vision is to become the number one brand of choice for the global migrant community.”
While Lycamobile did not respond to an email questionnaire, industry sources said the company is eyeing the MVNO space since it already has an India office. It operates in India as Lyca Telecom and offers international calling services. “Given that Lycamobile is one of the biggest MVNOs in the world, it is logical to expect them to expand their existing operations,” said an industry executive on condition of anonymity.
In the international markets, MVNOs offer tariff plans targeted at specific consumer categories. Arpita Pal Agrawal, Leader-Telecom, PwC India, said: “In that sense the MVNO space is open in India, as targeting based on identified customer segments is not very prevalent so far.”
Analysts reckon that since the Indian market is already very competitive, with the lowest tariffs in the world, MVNOs might be more successful in non-urban centres.
“It would be prudent to offer services in rural or remote areas where telephony services are still lacking. Since the future is in data services, it would be prudent for MVNOs to enter the market with a focus on increasing data services across the country,” said Hemant Joshi, Partner, Deloitte Haskins & Sells LLP.
The other important issue is whether telecom networks have spare capacity to offer MVNOs without impairing their own network quality. “There could be specific telecom operators in India who might have spare capacity in specific circles to give to MVNOs,” said Agrawal.
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