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MVNOs (Mobile Virtual Network Operators) coming to India soon

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The recent recommendations by TRAI will bring in the much awaited MVNO model in the Indian Telecom Space and make it more interesting. In its Telecom Infrastructure Policy recommendations, TRAI have advocated grant of legal status to ‘virtual’ mobile operators or MVNOs.

A mobile virtual network operator (MVNO) is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service.

One of the suggestion made under New Telecom Policy 2011, is that any company can purchase a telecom license at a small fees tough it would not have spectrum linked to it. After getting the required license, the new company can contact or tie up with an existing operator for sharing either the latter’s spectrum alone or the entire network. Thus it would help in minimizing the cost of starting operations for new operators and could be a new source of income for the older ones.

The ‘virtual’ operator can then launch its own branded services, somewhat similar to how Virgin Mobile has launched in India, though Virgin’s is primarily a marketing deal.

“Allocation of numbers, number portability, interconnection with other service providers and roaming to be provided to MVNO by the parent Mobile Operator,” the TRAI says in its recommendations.

It would prove to be a boost for new companies waiting to launch their operations and it will also help companies like Loop Telecom and Etisalat who are yet to start commercial operations in most of their circles due to the intense competition in the market and the investment required to roll out a network.

“In case MVNO desires to exit the business, it shall give six months notice to subscribers, Mobile Operator,Government and the TRAI before stopping its services. Consequently, the MNO [mother operator] should offer its services to the subscribers of MVNO to migrate to any of the tariff plan of MNO without any extra charges,” TRAI adds.