Entry of Mvno’s in Indian Telecom Sector: Start a Revolution

Entry of MVNO’s in Indian telecom sector: Start a revolution

A mobile virtual network operator (MVNO), a wireless communications services provider that does not own the network infrastructure over which it provides services to its customers. It enters into a business agreement with a mobile operators to obtain bulk access of network services at wholesale rates, and then sets retail prices independently. MVNO may use its own customer service, billing support systems, marketing, and sales personnel, or it could employ the services of a mobile virtual network enabler (MVNE).The main components of the model of MVNO are the following:

• Access to infrastructure, like base stations, transceivers, home location registers, or switching centres.
• Pricing, and billing systems, also including value-added services such as voicemail or missed call notifications.
• Consumer-facing aspects like sales, marketing, and customer relationship management activities like customer care or dispute settlement.

MVNO model is rapidly is successful in the countries such as UK, the US and some other European countries. Wireless business in India is growing 75percent year on year, regulatory requirements around industry structure, spectrum allocation, and licensing and operations currently are present hindrance to the MVNO model in India. In the country MVNOs are successful only in rural and hilly areas where there is lack of infrastructure services i.e. network coverage is not of high quality. Also as the development in optical fibre network is completed by government there would be no market for them in metros. But according to experts introduction of MVNO could bring cheaper tariff plans. Tata Teleservices earlier partnered with Virgin Mobile for an MVNO-type partnership to be few years ago. The brand Virgin Mobile has now been merged into Tata Docomo. It also has another tie up with Future Group - Talk24 Mobile (GSM), which is not MVNO but similar to its wireless markets in Delhi, Mumbai and Chennai today are catered by number of mobile networks and there is an evidence of additional network rollouts by the new entry. This could lead to potential opportunity for an MNO with less competitive retail operation to offer wholesale capacity. MNOs are primarily targeting first-time subscribers who could drive growth and are unlikely to pull back from the retail market.