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Mvno Licence Terms Finalised

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The Department of Telecommunications has decided to peg the entry fee for Mobile Virtual Network Operators (MVNO) at a maximum of Rs 85 crore for a pan-India licence.

MVNOs do not own spectrum or infrastructure. They buy airtime wholesale from the existing mobile operators and then resell it to consumers under own branding and tariff plans. Usually, MVNOs target a specific-user group such as the youth or women.

Companies with an existing retail and distribution chain are ideally suited to become an MVNO. DoT is expected to spell out the policy to give the licences soon. This will enable international companies, which had missed out on getting a telecom licence, to get a foothold in the fastest growing mobile market. Global players including BT (formerly British Telecom), Verizon and France Telecom have approached the telecom regulator to open up this segment.

The Telecom Commission has decided that virtual operators will have to pay an entry fee which is equivalent to 10 per cent of what the unified access licence players pay, subject to a ceiling and floor price for each service area.

The maximum entry fee for Metro and Circle A states has been pegged at Rs 5 crore, Rs 3 crore for Circle B states and Rs 1 crore for Circle C states. The Commission has set the floor price at Rs 1 crore for Metros and Circle A states, Rs 50 lakh for B Circle states and Rs 25 lakh for C Circle regions.

For example, in order to get a licence for Delhi, MVNOs will have to pay only Rs 5 crore even though 10 per cent of the entry fee paid by the unified access providers would work out to be Rs 17 crore. In the case of Jammu & Kashmir, virtual players will have to pay Rs 25 lakh despite the 10 per cent working to be just Rs 20 lakh.

The Commission has also decided that MVNOs will have to pay spectrum charges similar to what existing operators pay. In addition they will have to give a performance bank guarantee equivalent to 5 per cent of what the existing mobile players have paid.

Conducive factors

According to analysts, new players will have significant excess capacity available on their networks to sell to MVNOs. Some of the existing players who are not in the top 2-3 in terms of market share could also partner with virtual operators.

The other major catalyst for the emergence of MVNOs is the rollout of third generation technology-based networks. As customers are migrated to 3G, the 2G network capacity becomes more readily available for MVNOs.

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Because both are had built excellent CDMA netowrk , but service name GARUDA(MTNL) and TARANG(BSNL) is not popular.

So player like Verizon is running good service in USA on cdma technology and is waiting for entry into indian telecom market.

This MVNO term and condition is not attractive but still BSNL was in hurry to generate revenue from it's existing almost unsued CDMA n/w.

So BSNL is keen to lend n/w to mvno and virgin is keen to enter india.

as per expecting mvno to be starting from june/september2009.

Virtually MVNO will take no time to start service soon.

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