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India may see mobile virtual networks soon

Virtual mobile companies, or Mobile Virtual Network Operators (MVNO), offering mobile services on rented spectrum could soon start operations in India.
Hindustan Times | By Archana Khatri, New Delhi
UPDATED ON APR 16, 2008 08:34 PM IST

Virtual mobile companies, or Mobile Virtual Network Operators (MVNO), offering mobile services on rented spectrum could soon start operations in India.

The Department of Communications has asked the Telecom Regulatory Authority of India to frame guidelines for allowing virtual mobile telephony in India, a move that could spark a fresh round tarriff cuts.

“We are still working on the paper” TRAI Chairman Nripendra Misra told Hindustan Times. Misra also said that the regulator will take about 10 more days to come out with its recommendations for MVNOs in India.

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 (MOU) in bulk from traditional mobile operator but have their own SIM card, branding, marketing, billing, and customer care operations.

If the government allows the entry of mobile virtual network operators in India, the move will benefit foreign labels like Virgin Mobile, who are keen on offering services as a virtual mobility player in India.

Virgin Mobile, which offers virtual mobility in the US, 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.

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