Mobile virtual network rules likely soon

Mobile subscribers will soon have more choice on service providers. Nearly three years after the policy was cleared, the Telecom Commission is set to finalise the guidelines to issue mobile virtual network operator (MVNO) licence.

Under MVNO, a service provider can offer mobile services to customers under its own brand name, without owning network or spectrum. It buys wholesale minutes from an operator and resells these to customers.

The move will not only allow new players to come in; it will also provide a revenue source for many Indian telcos with a lot of excess network capacity and spectrum.

The Department of Telecommunications (DoT), which had cleared the MVNO policy in 2009, however, has had serious differences with the regulator on the final guidelines to allow MVNO.

Top sources say this has not been sorted, but the final guidelines are expected to be endorsed by DoT, for which a memo has already been prepared.

Under the guidelines, an MVNO can be affiliated to only one mobile network operator but a mobile network operator can have more than one MVNO. The MVNO licence will be for 20 years. Licence fee and spectrum charges will be payable by the MNO on the adjusted gross revenue (AGR) arrived at after adding the gross revenue of the MVNO to the gross revenue of the MNO, less the amount received by the MNO from the MVNO.

Also, as part of the licence condition, DoT will have the right to seek details of the revenue and the accounts of the MVNO and audit these.

According to analysts, there would be 86 million subscribers on MVNO’s network by 2015. In the last few years, around 500 MVNO’s have launched services across the globe. In the US, there are a little over 50 MVNOs, including companies such as AirVoice Wireless and Boost Mobile. Virgin Mobile, which tied up in India with the Tatas to offer services, is one of the leading players in this business.