03 June 2009

Video: Indian Telecoms Commission OKs MVNOs

03 06 2009 - If you want to study how NOT to roll out an effective telecommunications infrastructure in past years, you need look no further than India. In a country that had mastered the old British colonial art of creating unnecessary bureaucracy, rolling out new technology was always going to be a complex and frustrating exercise, reports Tony Poulos.

Yet despite the early issues of limited wireless spectrum (shared by the military), circle licences, competing wireless technologies and anageing fixed-line network, India continues to surprise the rest of the world with its dramatic and continuing subscriber growth and innovative telco business models, sometimes involving total outsourcing of both network and Business Support System (BSS) functions.

News from India this week that 11.9 million new subscribers were added to the mobile networks in April would be daunting for most other countries. According to theTelecom Regulatory Authority of India (TRAI), Bharti Airtel is the largest operator with 23.96 per cent of the market with Reliance and Vodafone Essar competing for second spot with 18.54 and 17.72 per cent share respectively. Five others share the remainder.

If you think India is currently a highly competitive market it’s about to get a lot more interesting with the announcement that the Indian Telecom Commission has given consent to allow Mobile Virtual Network Operators (MVNOs ) to launch their services in the country.

Following the commission’s approval, the Indian government will soon issue a formal notification along with guidelines for MVNOs.

The Commission says that MVNOs won’t be allowed to do "multiple parenting". Instead each MVNO will only be allowed to tie up with a single mobile operator in an area of operations. Mobile operators will be allowed to tie up with multiple MVNOs. The Commission further revealed that the licences to the MVNOs will be awarded for a 20 year period.

MVNOs are normally associated with developed markets where niche players emerge to address market sectors that need extra services or are being poorly serviced by the network operators. It may seem a little early for the Indian market, but with the rush to capture market share the operators can easily overlook the requirements of enterprises and high worth individuals - these sectors may be expecting a little more attention.

There will be no shortage of MVNO takers in this market and each will be keen to address the higher ARPU customers. Whether or not they will succeed will be another thing since the track record of MVNOs in developed markets has been mixed at best.

To top that off, India will finally auction its third-generation wireless radio (3G) spectrum by the end of this year, a sale originally planned for January this year but delayed because the downturn.

The telecoms ministry had earlier expected the auction to raise 300 to 400 billion rupees ($6.4 to $8.5 billion), but the finance ministry estimated the sale would bring just half as much because of the general economic downturn.

Source: Telecom TV

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