Late nod to VNO could mean vir­tu­ally no of­fers

The Financial Express - - FRONT PAGE - Fe Bureau

New Delhi, March 28: The Telecom Com­mis­sion on Mon­day de­cided to al­low vir­tual net­work oper­a­tors. This means any player with mar­ket­ing abil­i­ties but sans a li­cence to pro­vide mo­bile or land­line ser­vices can buy air­time in bulk from li­censed oper­a­tors and re­tail it to cus­tomers like mo­bile oper­a­tors do.

In al­low­ing VNOs, the com­mis­sion has ac­cepted the Telecom Reg­u­la­tory Au­thor­ity of In­dia’s sug­ges­tions. It would have been a game changer had it come some years ago when it was first talked of.

How­ever, at the cur­rent stage there's hardly go­ing to be many tak­ers for it. But there might be some scope for the state-owned, loss-mak­ing BSNL to scout for some VNOs to mar­ket its ser­vices.

In the case of VNOs, though the net­work and spec­trum be­long to the li­censed op­er­a­tor, the for­mer be­comes the in­ter­face with the cus­tomers and also pays li­cence fee, etc.

The rea­son why there won't be many tak­ers for the VNO model in the pri­vate sec­tor is that they are in a con­sol­i­da­tion mode and al­ready trad­ing their spec­trum with a big­ger player or in merger talks with some in cer­tain cases.

Some years ago, Tata Te­le­ser­vices en­tered into a pact with Tata DoCoMo which was very sim­i­lar to the VNO model. How­ever, since at that time VNO was not al­lowed, only the mar­ket­ing part was done by DoCoMo while billing, li­cence pay­ment, etc, was done by Tata Te­le­ser­vices. This ar­range­ment even­tu­ally failed.

With re­gard to the spec­trum pric­ing for the 700, 800, 900, 1800, 2100 and 2300 MHz bands, the Telecom Com­mis­sion has de­cided to seek cer­tain queries from Trai on its rec­om­men­da­tions. Its ba­sic query is the ra­tio­nal for Trai to rec­om­mend the price of the 700 MHz band at four times that of the 1800 MHz band. It also wants to know whether it makes sense to auc­tion all of 700 MHz at this stage when the ecosys­tem for the band is yet to be de­vel­oped. Trai had sug­gested that all of it be auc­tioned.

Trai needs to re­spond to the com­mis­sion’s queries within 15 days of re­ceiv­ing it. It can ei­ther con­cur with the com­mis­sion or stand by its rec­om­men­da­tions. Af­ter this process, the TC is free to go ahead with what it deems best as Trai rec­om­men­da­tions in the pol­icy ar­eas are not bind­ing on it. Trai has rec­om­mended a record high base price of ` 11,485 crore per MHz for the 700 MHz band.

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