MVNO likely for setting up broadband network

The department of telecommunications (DoT) is considering the introduction of a mobile virtual network operator (MVNO) model to set up a wireless broadband network in rural areas. This can be used by multiple operators.

The USOF division has asked the licensing wing of the department to look into the MVNO model for setting up the broadband network and take a decision, since the DoT is yet to come out with an MVNO policy, according to an internal department note.

The project would be funded through DoT's universal service obligation (USO) fund. Currently, the USO fund has a total corpus of Rs 15,000 crore and the annual contribution of telecom operators stand at about Rs 6,000 crore.

When contacted, a senior DoT official confirmed the department was considering the MVNO model.

The MVNO issue was raised by state-run telecom major BSNL. It had said, "The cost of setting up parallel infrastructure by two operators in rural areas would be wastage of national resources. It would be better that only one operator is allowed to roll out the network in rural areas and other operators may use the same network for providing services through MVNO."

Through the MVNO model, an operator would be able to offer services using spectrum/infrastructure of other telecom service providers. MVNO does not own spectrum/network, but enters into commercial arrangements with telecom services providers. Currently, MVNOs are not allowed under the government policy.

The Telecom Regulatory Authority of India had, in 2008, given its recommendations on allowing MVNOs. Subsequently, through a reference from DoT in 2009, it came out with different guidelines. Since then, DoT is still working on the guidelines for MVNO.

DoT is in the process of drafting the tender for bids for the broadband network. Under this scheme, two operators would be selected in each circle through a bidding process.