India awaits MVNOs, but market will be judge

Posted by Chris Garland Thursday, March 5th, 2009

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The long, agonized wait for MVNOs to enter India may be over, at least in bureaucratic terms, but only time will tell if prospective entrants can fit themselves to the world’s second biggest and increasingly competitive market.

In a country where 10 operators compete to offer the lowest tariffs to a vast population of more than one billion people, MVNO opportunities will necessarily limited to higher-end segments with a more realistic rate of return, given the very high cost factors and minimal return involved in establishing a presence.

The news filtering back from the country’s Department of Telecommunications (DOT) claiming that Nokia, the world’s biggest device vendor, and network equipment provider Ericsson are among those interested in partnering possible MVNO ventures in India, will come as a surprise to many industry observers, considering the existing mobile telecoms landscape.

Although the government has now approved the Telecommunications Regulatory Authority of India (TRAI)’s recommendations to allow MVNOs in the country, it remains to be seen how quickly any will actually appear, given that the issue has been beset by bureaucratic disagreements among India’s notoriously spat-prone regulatory agencies.

While the DoT has accepted the recommendations made by the Telecom Regulatory Authority of India (TRAI) on MVNO regulations and the DoT has said it will now liaise with the TRAI on several key issues in the recommendations, senior officials from the TRAI have criticized the DoT for approving the entry of MVNO’s into the Indian market before finalizing regulations.

“The DoT has sought clarifications on several key policy issues regarding MVNOs from us,” the unidentified TRAI official told local press. “We do not understand how the DoT can approve the entry of MVNOs and then seek clarity on regulations from us.”

Only time will tell if MVNOs will be able to compete in India’s dog-eat-dog mobile market, though expect casualties.