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.

The Department of Telecom re-considers its position regarding Mobile Virtual Network Operators in India

The Department of Telecommunications (“DoT”) is considering permitting the entry of Mobile Virtual Network Operators (“MVNOs”) that are presently not allowed to operate in India. Recent media reports suggest that the DoT is likely to seek views of the Telecom Regulatory Authority of India (“TRAI”) on MVNOs in India.

The concept of MVNOs is established in the telecom industry worldwide and is common in countries such as the US, UK and Australia. It is expected that once MVNOs are introduced and implemented in India, the operational expenditure of the telecom operators and service providers would reduce. This might also increase the level of competition in the telecom industry.

The TRAI, in 2011, had provided certain recommendations on MVNOs. TRAI provided that a Unified Licence holder who do not possess spectrum should be allowed to work as MVNO, however, such license holder shall cease to be an MVNO on procuring spectrum. Further, the TRAI had also recommended that MVNOs be allowed to set up their own infrastructure and fulfill all obligations like full-fledged telecom operators, although restricting that a MVNO should not partner with more than one telecom operator within a district.

As per recent reports, DoT is again considering to seek TRAI’s view / recommendations on MVNOs. The DoT is likely to seek TRAI’s views on the need and timing for introduction of MVNOs in India, the terms and conditions for operations and the number of such operators / service providers.

The TRAI’s recommendations would be considered by the DoT while preparing guidelines for MVNOs.