Telecom Regulator Recommends Introduction of Virtual Network Operators in the Telecom Space & DoT extends full MNP deadline

Telecom Regulator Recommends Introduction of Virtual Network Operators in the Telecom Space

Recently, the Telecom Regulatory Authority of India (“TRAI”) has issued recommendation for introducing Virtual Network Operators (“VNOs”) in the telecom sector vide press release no. 30/2015 dated May 1, 2015. Last year, the DoT, while exploring the possibility to permit entry to the VNOs, had sought the views of the TRAI. Our previous post on the subject can be accessed here.

The TRAI in the recently issued recommendations has proposed introduction of a licensing regime for the VNOs, allowing them to offer all segments of telecom services, including voice, data and video. The VNOs are service delivery operators that provide telecom services without owning spectrum or network infrastructure, but rely on the network and support of infrastructure providers. The VNOs buy bulk quantum of talk-time and bandwidth and then sell the same to end users under their own brand name and tariff packages.

As per the recommendations issued by the TRAI, VNOs are to be introduced on the basis of the mutually accepted terms between a Network Service Operator and a VNO. TRAI also proposes that VNOs can be permitted to set up their own network equipment, in cases where there is no requirement of interconnection with other Network Service Operators. TRAI has taken the view that the terms and conditions of sharing infrastructure between network operators (such as Airtel, Vodafone and BSNL) and a VNO should be left to the market forces. Nevertheless, the TRAI or the DoT shall have right to intervene to protect the interests of consumers and the telecom sector.

With regard to the licensing regime, the TRAI has proposed a separate service authorisation under the Unified License, which is the single license for all telecom services in India. The term of the license for the provision of VNOs is proposed as 10 years, extendable by further periods of 10 years.

In India, Tata Teleservices had partnered with Virgin Mobile for MVNO type venture. The UK based partner later pulled out from the partnership and the brand Virgin Mobile was been merged into Tata Docomo.

DoT extends full MNP deadline

As readers may be aware from our earlier posts, the Department of Telecommunications (“DoT”) had fixed May 3, 2015 as the deadline for implementation of full / inter telecom circle Mobile Number Portability (“MNP”) in India. The said deadline for the implementation has been extended by two months. The DoT has directed the implementation of full MNP across the country by July 3, 2015.

The Cellular Operators Association of India (COAI) had sought extension on the basis that the telecom operators are required to make technical modifications to their networks due to changes in National Numbering Plan for the implementation of full MNP, which would take time of about eight weeks.

One Nation – Full Mobile Number Portability: Inter Circle Portability from May 2015

The Telecom Regulatory Authority of India (“TRAI”) has issued the Telecommunication Mobile Number Portability (Sixth Amendment) Regulations, 2015 vide its Press Release No. 15 of 2015,  for full Mobile Number Portability (“MNP”) initiating the implementation of the ‘One Nation – Full Mobile Number Portability’ from May 3, 2015 onwards.

The TRAI had earlier made recommendations with regard to implementation of full MNP, subsequent to which the Department of Telecommunications (“DoT”) had amended the MNP License Agreement facilitating the same. The DoT had given 6 months time to the telecom service providers to implement full MNP from the date of issuance of the instructions in November 2014. Please refer our previous post in this regard here. However, in order to ensure effective implementation, certain changes were required to be made in the existing MNP Regulations. The TRAI has, after due consultation process, issued the required amendments.

Implementation of full MNP would imply an inter telecom circle portability of mobile numbers, which presently is permitted only within the telecom circle of such user. Once the same have been implemented, the users would be able to retain their mobile numbers even if such user is changing cities / telecom circles being able to avail themselves of full MNP in any part of the country.

The TRAI has also amended the MNP Regulations with respect to certain procedural requirements for the effective implementation of full MNP, such as treatment in case of default in payment to the donor operator (the one from whose network the subscriber is opting out).

As per media reports, about 15-20% of the 940 million users who use roaming services will be benefited, enabling them to keep their mobile numbers. However, the Cellular Operators Association of India says only 2% of the users will be impacted.

The Telecom Commission, which is the highest decision making body of the DoT had given its nod to the implementation of full MNP in June last year. Our previous post relating to the in-principle approval by the Telecom Commission can be accessed here. 

Telecom Companies Asked to Implement Full MNP by May 2015

The Department of Telecommunications (“DoT”), as per certain media reports, has intimated various telecom operators the deadline of May 2015 for the implementation of full mobile number portability (“MNP”).

The full MNP, once implemented, would enable the telecom subscribers to retain their mobile numbers while re-locating to different locations as well. Presently, the subscribers are only allowed to switch the network operators within the same telecom circle only. Thus, the full MNP would enable the inter-circle porting of mobile numbers, across operators and also across telecom circles. The intra-circle MNP has been already in place since 2010-2011.

The service of full MNP was to be launched in April 2014, however the same got delayed on account of certain technical reasons related to implementation. With the technicalities having been sorted out, the Government has now announced the implementation of the service.

As per media reports, the DoT has in its letter dated November 3, 2014 communicated to the telecom operators about the decision to implement the full MNP facility. Once implemented, the facility would enable the subscribers to port their mobile numbers across the licensed service area also. The DoT has given 6 months time to the telecom service providers to implement full MNP from the date of issuance of these instructions, implying the deadline for implementation as May 3, 2015.

However, a general view of the industry players appears to be that a 6-month time would not be sufficient for the upgradation of network for full MNP. This also acquires importance, since the telecom licenses of a number of players are expiring over the next 2-3 years and the uncertainty of the time of spectrum auction. With this uncertainty, the players would not be very eager in making additional investments in the infrastructure for upgrading their networks.

In relation to the implementation of full MNP in India, please refer our previous post Full Mobile Number Portability by March 31, 2015.

Full Mobile Number Portability by March 31, 2015

Full Mobile Number Portability (“MNP”), which would enable the users to change operators, retaining their exiting numbers across telecom circles, has received nod from the Telecom Commission. The panel decision will now be placed before Telecom Minister, Mr. Ravi Shankar Prasad, for final approval.

The Telecom Commission, which is the highest decision making body of the Department of Telecommunications (“DoT”) for various telecom matters, approved full MNP on October 15, 2014. The said policy decision to allow full MNP has been pending for quite some time now and was also a part of the DoT’s 100-day agenda under the new Government. Refer our earlier post on the 100-day agenda of the DoT. The move comes in almost 2 years after the facility was first introduced in the country.

The DoT has set a deadline of March 31, 2015 for the implementation of full MNP across the country, giving the operators around 6 months of time for preparing for implementing the policy decision and the necessary changes in their networks.

This comes in furtherance to an in-principle approval granted by the Telecom Commission earlier this year (our post on the DoT’s in-principle approval of full MNP can be accessed here). As per recent media reports that the Telecom Commission has generally accepted the recommendations of Telecom Regulatory Authority of India (“TRAI”) in this regard.

Presently, in India the number portability facility is restricted to changing of telecom operators while retaining existing numbers within same service area, i.e. a subscriber in a particular circle can switch operators within that circle only. However, upon the successful implementation of full MNP, the switching of operators would be possible across circles as well. Full MNP will also help doing away with the roaming charges, presently applicable, since the new circle would become the subscriber home base without any change in the phone number.

As per recent data issued by the TRAI, at the end of August 2014, out of India’s 924.32 million mobile subscribers, 129.56 million had availed of the MNP facility.

Department of Telecom’s 100-day Agenda

The newly appointed Telecom Minister, Ravi Shankar Prasad, is said to have promised decisions on long pending policy matters in his first 100 days as in-charge of the Ministry of Communications and Information Technology.

The primary decision making issues include the implementation of inter-circle ‘mobile number portability’ to enable the mobile services’ consumers to retain the same number across the country, irrespective of the geographical location and service provider and preparation of the roadmap for the biggest spectrum auction in 700 Mhz, 800 Mhz (CDMA), 900 Mhz and 1800 Mhz bands for the investors to plan participation and invest in the sector.

In-principal approval for implementation of full mobile number portability has been granted by the Telecom Commission earlier this month (our post on the Telecom Commission’s decision is here).

Besides, the ministry is also expected to issue the much awaited guidelines for sharing of spectrum between operators across different bands and additionally, seek the cabinet’s approval on permitting spectrum trading for the optimum utilisation of the scarce natural resource.

The 100-day programme is likely to witness the notification of the long-pending graded penalty scheme for telecom operators, which has already received the nod of the Telecom Commission and issuance of the country’s first National Broadband Policy and the Telecom Security Policy.

It has been reported that the 100-day agenda does not cover the implementation of the National Optical Fibre Network and establishing a government user network on the same and provisioning of mobile services in the Naxal-hit areas and villages. These schemes / policies have also been pending decision and implementation for quite a while.

Department of Telecom’s Nod to Full MNP in India

Mobile Number Portability (“MNP”) across the country would soon be possible, after an in-principal approval by the Telecom Commission, the highest decision making body of the Department of Telecommunications (“DoT”). With this decision, the Government inched closer to implementing the ‘One Nation, One Number’ plan envisaged under the National Telecom Policy 2012.

Upon implementation of the decision, the customers will be able to retain their cell-phone numbers on relocating to any part of the country and even changing operators. Presently, MNP in India has been implemented on a telecom circle basis, where the subscribers can switch the service providers operating within the same service area. However, in the future the customers would be at liberty to retain a number in another service area as well.

The Telecom Commission and the DoT have stated that they would require clarifications on a few issues such as enhancement of entry fee, performance bank guarantee and financial bank guarantee related to existing MNP licences. In this regard, they are expected to approach Telecom Regulatory Authority of India (“TRAI”). On the basis of the clarifications, the final decision on the issue would be taken and the same would then be sent to the Cabinet. A final notification will be issued as soon as the clarifications from the regulator come in.

Previously, in September last year TRAI recommended on full and nationwide MNP stating that the same be fully implemented across the country within six months. The TRAI had suggested DoT may carry out the requisite modifications and alterations to the existing license for the MNP service to facilitate inter service area MNP. Despite this, the same remains to be implemented.

The industry experts have been reported to be of the view that the operators would require around $10 million to build the enabling structure for nationwide MNP. The service would help pan-Indian players gain subscribers at the cost of the operators whose customers relocate to states they are not present.

In addition to approval for full MNP, the Telecom Commission has cleared the proposal for establishing comprehensive mobile network in the north-eastern region and also the revised estimated cost for setting up mobile towers in the Naxal-hit areas. Approval has also been given to set up mobile services across 50,000 presently uncovered villages. In another major move, the proposal to set up government user network over the National Optic Fibre Network was also granted.

The Commission also approved the revised strategy for implementation of the National Optical Fibre Network project worth Rs 20,000 Crore to connect 2.5 lakh village panchayats with an extended deadline of March, 2017, earlier proposed to be completed by September, 2015.