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More competition: 80 firms apply for MVNO licence

Retailers, branded firms, PSU telcos and telcos with excess spectrum will find MVNO most useful

The government has received applications from 80 firms for mobile virtual network operator (MVNO) licence. Under MVNO, firms buy airtime and bandwidth (for calls and data) in bulk from existing operators and then offer services under their brand.

Some 70 firms plan to offer localised services and have applied for district-level MVNO licence, while 10 firms have applied for national-level licence.

MVNO licences could be issued over the next few months or even earlier, according to Times of India

The scheme will ensure greater competition in the telecom sector, and offer more choices to consumers.

Telcos having excess spectrum in various circles can tie up with MVNO firms, earning extra revenue on their bandwidth. PSU telcos, which are not at home in the marketing domain, will find MVNOs useful partners. MVNO is a good option for tapping underserved areas, small towns and rural areas. Branded firms in areas like retail and travel, would find MVNO a useful adjunct to their business.

The Richard Branson-promoted Virgin Group had started providing mobile services in partnership with Tata Teleservices a few years back. However, the Cellular Operators Association of India objected to the partnership, and the business was later discontinued.

Future Group, a well-known retail chain, has partnered with Tata Teleservices for its 'T24' mobile services, under which the retailer gives free airtime with shopping. Retailers, in fact, have all the resources they need to become mobile service providers except a mobile network. Which is why globally, Walmart, Tesco and 7-Eleven have all adopted VNO.

On the other hand, big telcos, with strong brands, who typically don't have excess spectrum capacity, may find the MVNO idea hard to adopt, especially in a low tariff environment. Besides, the cut-throat tariffs in India, especially after Jio's entry, may not make it easy for MVNO players to offer discounts despite bulk purchases at wholesale prices.

Maybe, but watch this space for companies with innovative business models.

Based on stories in TNN and Hindu

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