The Telecom Regulatory Authority of India (TRAI) on Wednesday opened the door for virtual mobile companies, or mobile virtual network operators (MVNO), under which a separate licence is to be issued to operators who do not have their own spectrum for offering mobile service but have a tie-up with an existing player to do so.
A telecom analyst said if the department of communications accept recommendations, it solve the acute spectrum crunch problem in the country and at the same time mobile services could be offered without disruptions.
MVNOs do not own the radio frequency (spectrum) or the telecom infrastructure but provide mobile telephony to customers through the spectrum and infrastructure they share with traditional mobile operators on a commercial basis. A MVNO buys minutes of use in bulk from traditional mobile operator but have their own SIM card, branding, marketing, billing, and customer care operations.
Virgin Mobile has already formed a brand sharing arrangement with Tata Teleservices . According to Morgan Stanley, tariff plans introduced by Tata Teleservices under the ‘Virgin Mobile Brand’ are cheaper by 25-30 per cent, compared to similar schemes offered by other players.
There is no rollout obligation for MVNOs and the foreign direct investment (FDI) limit is 74 per cent, which is same as a mobile network operator (MNO). The entry fees for MVNOs are 10 per cent of MNOs subject to a maximum of Rs 5 crore for metro/category A, Rs 3 crore for category B and Rs 1 crore for category C service areas.
Allocation of numbers, number portability, interconnection with other service providers and roaming are to be provided by parent MNO and subscribers to be protected for failure of agreement between MNO and MVNO or MVNO quitting service, TRAI said.