New MVNO policy will allow retailing of spectrum, infra

S Ronendra Singh New Delhi | Updated on January 20, 2018


Will help operators expand base; aid niche players without financial muscle

Almost eight years after it was first proposed, the policy for allowing Mobile Virtual Network Operators (MVNO) is set to be cleared. This will allow incumbent operators, including Airtel, Reliance Jio, Idea and Vodafone, to sell their spectrum and infrastructure to smaller, niche players with an MVNO licence.

Mobile virtual network operators are service providers which take bandwidth and infrastructure at wholesale rates from mobile operators and then resell them in the market with their own branding and tariff plans. They do not own either spectrum or network infrastructure, but provide customised mobile services usually targeted at a specific segment.

This will allow small players without the financial muscle to buy spectrum through the auction route to become niche mobile service providers. For example, large retail chains and financial service providers with a national footprint may use the MVNO route to offer mobile services. For telecom companies partnering with MVNOs this could mean a cheaper and faster option to reach out to a larger customer base, especially in 3G and 4G services.

The Telecom Commission, at its meeting on Monday, decided that telecom operators will have the right to sell a bulk of spectrum at a fixed rate to a local vendor which can use the airwaves to offer voice and data services to local customers at its own tariff.

This move will not only benefit the telecom service providers but also customers and local cable operators, as well as foreign companies such as Virgin Mobile, AT&T and China Mobile who want to operate in India, sources privy to the meeting told BusinessLine.

The official said the policy will be announced “in a matter of weeks and not months.”

MVNOs would benefit the telecom service providers in places like Naxal-hit areas or rural areas, where a local player with a stronger brand can operate better.

However, according to telecom experts, the policy could be late as the market is highly competitive and ample spectrum is available.

“It may be helpful to tap some small pockets where local operators can ride on spectrum of BSNL or any other operator (where they are present) and provide some specialised/ relevant local contents,” Hemant Joshi, Partner at Deloitte Haskins & Sells LLP, said.

Emergency number

Meanwhile, the Commission has also accepted the TRAI recommendation for ‘112’ as a single emergency number for all services such as police, fire and ambulance. The services will be ready in few months and if successful after a year’s trial then the Centre would do away with all the other emergency numbers.

The Telecom Commission also discussed issues related to the reserve price recommended by TRAI for 700 MHz band (₹11,500 per MHz).

Published on March 28, 2016

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