Trai has also identified mvnos as a distinct service

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Unformatted text preview: nfrastructure effectively. If, on the one hand, this could lead to increased collaboration between players, then on the other hand, there are questions around sustainability of the MVNO business case in a highly competitive 6 to 7 player, low tariff, emerging Telecom market. TRAI has also identified MVNOs as a distinct service provider with its own licensing and regulatory framework, while Dynamic MVNO activities in mature mobile markets, December 2007 MVNO No MVNO 100% 50% India Vietnam Indonesia China Philippines Thailand Japan Malaysia South Korea Taiwan Australia New Zealand Hong Kong 0% Singapore Mobile Penetration % 150% Source: International Telecommunications Union: World Telecommunications/ICT Indicators Database, December 2007 India 2012: Telecom growth continues 19 allowing the virtual operators to decide upon their business model on the basis of strategies and capabilities. In summary, the key TRAI recommendations relating to MVNOs are: agreement between the MVNO and MNO needs to be submitted at the time of the license issue • Foreign Direct Investment (FDI), M&A restrictions shall be the same as that of the MNO • License service area of MVNO shall be same as that of parent MNO and their mutual agreement would be driven by market forces • Entry fee would be 10% of that of the MNOs, subject to a maximum of INR 5 Crore (USD1.2 Million) for Metro/ Category A, INR3 Crore (USD0.7 Million) for Category B and INR1 Crore (USD0.2 Million) for Category C service areas ► • No spectrum charges and roll-out obligations would be applicable to the MVNOs; annual license fees shall be same as that of MNO in the particular service area ► • No limit on the number of MVNOs attached to a MNO; however an There are two ways in which MVNOs could attempt targeting the Indian market: 1. MVNOs that follow the budget approach: MVNOs that could specifically aim to serve the needs of niche segment, competing solely on voice and SMS pricing would reduce ARPUs and focus on volumes-play. The appeal could be limited to a portion of the market, leading to diversifying into value-added services. 2. MVNOs that serve the needs of a niche segment: On the other hand, niche MVNOs have the ability to increase ARPUs by creating appealing differentiation in terms of content, customer service, information services and promotional offers Prospective MVNO groups Industry group Strength/competency Retailers Strong brands; extensive and efficient 7-Eleven, FamilyMart d...
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