The stage is being set for a new round of cellular tariff wars, this time in a new package. India may soon see independent labels selling telecom services but without their own networks — much like taxi services that lease cars but don’t own them.
The government is likely to issue guidelines for operators to set up “virtual” telecom networks that can offer voice and data connections at upto 50% less for domestic calls and 20-30% less for international ones.
Globally, these are known as “mobile virtual network operators” (MVNOs). Such operators buy network capacity from telecom operators and resell airtime/talk time to retail consumers with the freedom to package their own tariffs. But they must comply with security and other licence-related obligations.
“It is a loyalty-based niche market,” said Gaurav Dhawan, executive director, Clay Telecom, which offers services as an MVNO in more than 14 countries.
The youth-focused mobile services offered by Richard Branson’s Virgin Telecom in its 2008 tie-up with Tata Teleservices (TTSL) is the closest thing to an MVNO in India. “It was not a MVNO but closest to that description,” said Nirpendra Misra, former chairman of Telecom Regulatory Authority of India.
The entry of MVNOs in India will be especially useful for foreigners travelling in India, and people looking for low-cost roaming mobile services. Roaming rates imposed by operators are still high (`5-R20 per minute).
One model that may be introduced is the bundling of talk- and data-time with handsets. “Companies such as AirTel and Reliance Jio could tie up with the retail business in their portfolio, to market on this model,” said Sridhar Pai, CEO and founder of Tonse Telecom, a research and consulting organisation focused on the telecom sector.
“It will help in optimum utilisation of spectrum and assured revenue for telecom operators,” he felt.
Major retail players such as the Future Group and mega event organisers such as the Indian Premiere League (IPL) are believed to be keen to become MVNOs. Globally, Wal-Mart (Family Mobile) and Tesco (Tesco Mobile) are MVNOs.
The Board of Control for Cricket in India (BCCI), the promoters of IPL, did not respond to an email from HT.
Future Group already provides talk-time on T24 Mobile using TTSL. Kishore Biyani, the group’s chief executive, told HT: “We have 2.5 million users of T24, it has worked well for us. About MVNO it is too early for us to respond.”
T24 functions like an MVNO, but is not one.The then managing director of TTSL Anil Sardana had said T24 was a franchisee agreement, since MVNO guidelines were not in place.
If the government issues guidelines, the customer may find himself spoilt for choice as players engage on this new frontier.