Consumers' Association

Palakkad District Consumers' Association

An NGO in Special Consultative Status with the Economic and Social Council of the UNITED NATIONS

 Information note to the Press (Press Release No.  69/ 2008)

 TELECOM REGULATORY AUTHORITY OF INDIA 

For Immediate release

Tel. No : 011-23233291

Fax.No : 011-23235161

E-mail: param.trai@gmail.com

Website:www.trai.gov.in

 TRAI opens doors for Mobile Virtual Network Operator (MVNO)

New Delhi, 6^th August 2008 :- TRAI has today released recommendations on ‘Mobile Virtual Network Operator (MVNO)’ enabling the introduction of MVNOs in the Indian Telecom network. Department of Telecommunications (DoT) vide its letter dated 20^th March, 2008 has

sought TRAI’s recommendations on the need and timing for introduction of MVNO as well as terms and conditions of the license to be granted to such operators.

 TRAI had undertaken the public consultation process on the various underlying issues relating to the introduction of MVNO in India such as concept and definition of MVNO, different Models, need and timing for entry of MVNO, regulatory approaches, licensing issues etc. by issuing a consultation paper on 5^th May 2008, followed by an open house discussion in New Delhi on 16^th June 2008. Keeping in view the comments received from stakeholders during the public consultation process, international experience and internal study, TRAI has formulated its recommendations on the need and timing for introduction of MVNO as well as terms and conditions of the license to be granted to such operators. 

The introduction of MVNO is seen as a natural progression towards enhancing free market principles and contributing to the efficient use of existing telecommunication infrastructure.  

The Authority recommends definition of a MVNO as “MVNO is a licensee in any service area that does not have spectrum of its own for access service, but can provide wireless (mobile) access services to its own customers through an agreement with the licensed access provider, UAS/CMTS Licensee”. 

The spectrum for access services as on date would include: 2G, 3G and BWA spectrum. MVNO cannot participate in spectrum auction for Access Services in their service area, as they cannot have their own spectrum. Similarly, ISPs can become MVNOs if it does not have BWA spectrum. 

The summary of other recommendations are given below:

1.  MVNO to be  introduced as a distinct service provider with its own licensing and regulatory framework

2.  MVNO to be issued a license under Indian Telegraph Act

3.  Any Indian Company having a networth of Rs. 10 crore for Metro/ Category A, Rs. 5 crore for Category B and Rs. 3 crore for Category C service area, paid up capital of 10% of prescribed networth and satisfying licence conditions such as FDI, substantial equity etc., eligible to apply for MVNO licence.

4.   MVNO free to choose its business model (Full or Intermediate or Thin). Typically, a Thin MVNO would offer services in its own brand without any infrastructure and a Full MVNO could set up its own HLR, VLR, IN switches, MSC etc., but not the Radio Access Network (RAN).

5.   MVNO to get parented to an MNO in a service area.

6.  The license service area of MVNO to be same as that of parent MNO.

7.  Arrangement/agreement between MNO and MVNO to be driven by market forces.

8.  No limit on number of MVNOs attached to an MNO.

9.    Agreement with MNO to be submitted before issue of license to MVNO.

10. MNO to pay the spectrum charges for utilisation of spectrum by MVNO.

11.Entry fees for MVNOs – 10% of MNOs subject to a maximum of Rs. 5 crore for Metro/ Category A, Rs. 3 crore for Category B and Rs. 1 crore for Category C service areas.

12.  Annual licence fees same as that of MNO of the service area.

13.   Allocation of Numbers, Number portability, Interconnection with other service providers and Roaming to provided by parent MNO.

14. Subscribers to be protected for failure of agreement between MNO and MVNO or MVNO quitting service.

15. No Roll out Obligations for MVNO.

16. FDI limit 74% (same as MNO).

17. Bank Guarantee:  FBG – equivalent to two quarters license fees; PBG – 5% of MNO.

18. Restrictions on Mergers and acquisition on similar lines as MNOs.

 The full text of the recommendations is available on TRAI’s website  www.trai.gov.in

Contact details in case of any clarification:

Shri N. Parameswaran, Principal Advisor (RE), TRAI

Mahanagar Doorsanchar Bhawan,

Jawahar Lal Nehru Marg, New Delhi-110 002.

Tel. No : 011-23233291, Fax.No : 011-23235161

E-mail: param.trai@gmail.com

Authorized to issue:

(N. Parameswaran)