RCL tells Trai to junk holding cap

Seeks friendly regulation for virtual network.

Reliance Communications has asked the Telecom Regulatory Authority of India (Trai) to do away with the telecom licence regulation that restricts a telecom operator to hold 10 per cent or more stake in another telecom company.

The operator said this in its response to the Trai proposal that active infrastructure is pre-requisite to allowing mobile virtual network operation (MVNO) services in the country. MVNO allows a service provider to buy airtime from another and then resells it to users.

Reliance Communications said, "In order to have a friendly regulatory regime for introduction of MVNOs, a number of changes are needed in the licensing conditions, which include the current conditions specified in Clause 1.4 (ii) of the unified access service licence restricting a company or a legal person from holding 10 per cent or more equity in another licensed company in the same service area."

The company said the existing limitation would hinder commercial negotiations and entry of MVNOs.

It also suggested Trai to amend licence conditions to permit sharing all active telecom network elements, including radio infrastructure, and also to allow resale of various products offered by a unified access service licence.

Tata Teleservices said MVNO services should be permitted in the country at mutually acceptable terms between operators. It also asked Trai to develop an appropriate framework to regulate the functioning of MVNO.

However, the Cellular Operator Association of India and most GSM operators have opposed allowing MVNO services in the country saying that there was already enough competition.

The telecom industry has also opposed the Trai proposal to make infrastructure-sharing mandatory as part of the licence agreement. The opinions will be heard in a Trai discussion tomorrow.

The company said since there was limited spectrum in the country, further competition can be introduced through MVNO services.