To create an improved utilization of networks, the Telecom Commission in India has cleared a proposal issued by the Telecom Authority of India (TRAI) allowing licensing of mobile virtual network operators (MVNOs). After obtaining the licenses, VNOs will be able to buy minutes and bytes to offer voice and data services, respectively.
According to reports, the state will create a new license for MVNOs. The MVNO players would need to follow the rules followed by the telecom operators such as licensing fee.
Although the Commission nodded its approval, the Telecom Minister will need to approve the proposal.
Once obtained the licenses, VNOs can function under its own brand offering services such as mobile telephony, broadband, wireless hotspots etc., and can work in partnerships with more than one service provider. Network operators can also support more than one MVNO.
The chances are more likely for the MVNOs to focus on areas where the market’s traditional mobile operators have struggles to reach. They would help the less successful network operators reduce their marketing and sales costs, alongside sharing the operating expenses.
However, on the other side, the entry of MVNOs into the market would stiffen the existing competition in the market, which is already price-sensitive. The entry of Reliance Jio is also likely to cause disruption.
The retailers would benefit from MVNOs. A case in point is Future Group, which has a partnership with Tata Teleservices that enables it to offer its customers free airtime with their shopping. It already has 5 million users, which is expected to expand.
For the fixed line players, MVNOs is a way to extend their reach into the mobile segment via content and connectivity packages.