India's Telecom Commission approves VNOs

telecomasia.net

India's Telecom Commission has amended telecom regulations to allow virtual network operators, and multiple companies have expressed an interest in applying for a license.

Companies including retailers Supergroup and Shopclues.com as well as New Call Telecom - which provides instant messaging and Wi-Fi services in India - are potential candidates for a VNO license, the Economic Times reported.

Future Group already has an arrangement with Tata Telservices to give free prepaid airtime for subscribers with shopping. An MVNO venture would help the retailer expand its mobile operations.

According to the report, e-commerce website Paytm is another potential candidate for a VNO license. The company already offers online credit recharges for India's mobile operators.

But Rajan Mathews, director-general of GSM industry body COAI, told the Economic Times that he was skeptical that the VNO model will gain traction in India, due in part to the 14% license fee as well as spectrum usage charges VNOs are expected to pay.

In addition the VNO model has not historically proved popular in emerging markets with lower teledensity than the more mature markets, he noted. Indian operators do not have the excess capacity to take on VNOs and their own brands are very strong, he noted.

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