Global telcos favour lower fee for MVNO

By PAWAN BALI

New Delhi

June 8: Global telecom companies — BT, Orange and Verizon — have asked Trai to ensure that entry costs for a mobile virtual network operator (MVNO) in India is kept low.

Due to scarcity of spectrum in India, MVNOs could possibly be the only route for international telecom firms to enter India, besides costly acquisitions. Presently, MVNOs are not allowed in India. Trai is looking into the issue and is expected to come out with its recommendations soon.

MVNOs buy bulk minutes of traffic from existing mobile companies and resell them to their own subscribers. They offer mobile services to the subscribers generally under their own brand name. They add value to the service and offer differentiated service to niche market segments.

"Entry costs associated with licensing and regulation of MVNOs should be kept reasonably low in order to ensure that this does not become a disincentive to market entry," said BT, in its communication to Trai.

Orange said it is also important to regulate the mobile operators, who are entering in contracts with MVNOs. "In long-term mobile operators may raise prices to drive out MVNOs from the market and take full end user revenues. Therefore, clear guidelines are also required to be in place for mobile operators."

BT said Trai should provide itself with the right to intervene to solve access disputes in case they emerge (between mobile operator and MVNOs). Verizon said that the additional competition in the market through MVNOs will benefit consumers by ensuring competitive prices, new and innovative services.