Saturday, 21 February 2009

Pan-India MVNO license to cost INR 850Mln - India

The Department of Telecommunications has set INR 850 million (USD 16.99 million) as the entry fee for obtaining a pan-Indian MVNO licence. Both domestic and international players will have to pay the entry fee, which is subject to a ceiling and floor price for each service area. The entry fee is 10% of the amount, to be paid by the UASL players.

The maximum entry fee for an MVNO licence has been kept at INR 50 million (USD 0.99 million) for metros and ‘A’ category states; INR 30 million (USD 0.59 million) for ‘B’ category states; and INR 10 million (USD 0.19 million) for ‘C’ category states. In addition, the Telecom Commission has asked MVNOs to pay spectrum charges and a bank guarantee equivalent to 5 percent of the amount paid by mobile network operators.

In a related development, the Telecom Commission has rejected TRAI’s (the telecom regulator) recommendation that MVNOs should not be allowed to use the network of more than one operator. Therefore, MVNOs will be able to tie-up with more than one existing operator in an area to launch their services. However, in such a scenario, spectrum usage fees of an MVNO will be evaluated on the basis of the individual subscriber base of the telecom operator, whose cellular infrastructure it uses. This might discourage MVNOs from signing agreements with a large number of operators. The commission has also clarified that MVNOs cannot merge operations with existing operators, as they are categorised under two different types of licenses.

The move toward a burgeoning MVNO market is due in part to the roll out of 3G services across India, opening up large swathes of 2G network capacity to be used for MVNOs.