Consultation Paper on MVNO

Spice Response to various Issues

Issue 1. Do you agree with the definition of MVNO given in section

2.1.6? If not please suggest alternate definition with
justification.

Response: Conceptually MVNO does not share the spectrum he is only bulk
,. Buyer of MOUs for further retailing, therefore the suggested
Definition can be:

MVNO is an entity that offers mobile Access services to

Customers, but does not own its own Radio frequency,

Issue 2: Do you think there is a need to introduce MVNO in the Indian

Telecom Market. If yes, is it the right time to introduce MVNO
as a distinct service provider with its own licensing and
regulatory framework? Please elaborate the comments with
appropriate reasoning.

Response: Each administration has adopted its own brand of MVNO and the
time of its own choosing, depending upon level of competition and
teledensity. In India, as of today, we have 8- 9 mobile operators in
every Licensing area and with the roll out of networks by the new
Licensees, the number is expected to grow to 14 or 15; indicating
as it is, ample competition. In addition, it is also a fact that with the
government policy of release of Spectrum on ever tightening SLC,
there is hardly any surplus capacity with the MNOs with existing
Infrastructure resources. However, it can be considered as a right
time to introduce MVNO concept particularly to address the highly
targeted niche market like the rural areas and / or product centric
services to meet evolving customer needs. This will also help
deepening and widening of the market, hence MVNOs have a
potential to add to the current offerings by the MNOs.
MVNOs may be introduced under distinct Licensing
Framework, covering the services & Concept of MVNOs, while
Commercials should be left to mutual negotiations.
 In case, an MVNO is non-facility based, then he should be
governed by the regulations of MNO, particularly with regard to
billing, customer care, distribution, marketing and branding, sales
etc. However, if an MVNO is facility based, then separate regulation
needs to be put in place.

Issue 3: To what extent should the MVNO be permitted to set up their

own infrastructure?

Response: It should be left to MVNO to decide the business model as

Suited to its objectives.

Issue 4 (i): What Regulatory Model should be followed for MVNO in

the Indian context?

(ii): What kind of obligations may be imposed on MNOs so

that Mobile Virtual Network Operations are implemented
effectively in India benefiting the customers?

Response: The wholesale service sold by an MNO is an essential facility and

the retail competitor (MVNO) remains economically and
technologically dependent on him. Therefore, MVNO should follow
relevant aspects of existing regulatory model. The opening of the
network by an MNO to MVNO should be on voluntary basis,

MVNO must be responsible for fulfilling all the QOS

parameters, including continuity of service and National security
aspects, while providing services to its customers.
Issue 5: What should be the eligibility criteria for MVNO?

Response: MVNO, for all practical purposes is a subset of MNO or so to say,

an enhanced franchisee with its own branding. Therefore, any
established FMCG company with its own retail chain and marketing
acumen should be eligible..

Issue 6: Do you suggest different eligibility criteria for different MVNO

models and regulatory frameworks? If Yes, Please suggest
with justification thereof.

Response: Business model adopted by an entity depends upon its business

Objectives, and goal it wishes to achieve.It is not prudent to
 Discriminate on the basis of business model. Therefore, elgibility
Criteria and Regulatory framework has to be the same

Issue 7: Should there be any restriction on the number of MVNOs

attached to an MNO? Please elaborate the comments with
appropriate reasoning.

Response: No restrictions. Market forces and mutual

commercial agreements will take care of that. However an
MVNO can be associated with only one MNO in a licensing
area. This will ensure that MVNO does not undertake arbitrage.

Issue 8: What should be the commercial model/framework for

spectrum sharing by MVNO; w.r.t. (i) Department of Telecom
and (ii) MNO?

Response: MVNO must pay for the Govt levies including spectrum
charges on the terms of that of his MNO , based on his AGR
adjusting payments made to MNO, commercially; as pass thro’
revenues..

Issue 9: What should be the service obligations of MVNO? Please list

them with justification thereof.

Response: The Service obligations of a non facility based MVNO should be

concentrated on customer acquisition, customer management and
Value Added Service Provisioning.

For facility based MVNO, the service obligations would enhance so

as to include part of Network Services as well.

Issue 10. What should be the method and consideration for determining
the entry fee for MVNO?

Response: To encourage serious players , entry fee depending upon Service

area category may be prescribed. It could be 5 % of that of an MNO
in that service area..

Issue 11. What should be the definition of AGR for MVNOs?

Response: The definition of AGR for MVNO will be the same as that of MNO.
Payments made to MNO should be accounted as pass thro’
 revenues, so that Govt receives its levies from both the sources
transparently., without any duplication.

Issue 12: What is the best way to protect the subscribers both in terms
of continuity of service and applicability of tariff plan:

i) in case of a dispute between MVNO and MNO?

ii) in case MVNO wants to exit the business.

Response: Service Provisioning and Tariffs should be governed by the same

regulations as applicable to an MNO including making reference to
TRAI / TDSAT for resolution. In case of any dispute between the
two,MVNO/ MNO should ensure the continuity of same level of
service to the end users without any break in service. This aspect
should be governed by commercial agreements and regulatory
framework between the two. MNO License should be modified to
cover this appropriately.
Whether MNO decides to cut off network facilities to MVNO OR
MVNO decides to quit prematurely, in either case operators must
Inform the affected subscribers well in advance giving opportunity
Of being serviced from an alternate network to avoid any disruption
To his communication facilities.

Issue 13: Should there be any roll out obligations specified for MVNO? If
yes, what should be the penal provisions for failure/ delay in
fulfilling the obligations.

Response: There should not be any Roll out obligations on MVNOs.

Issue 14: What shall be the specific guidelines on the Mergers and
Acquisitions of MVNO? Please elaborate the comments with
appropriate reasoning.
Response: An MNO can have as many MVNOs as it can adequately serve,
but MVNO can be associated with only one MNO. Therefore,
MVNOs belonging to one MNO can merge without any restriction,
But in case of MVNO switching an MNO , he must surrender
The existing with due notice and choice to his customers,
Before shifting to the new one.

Issue 15: Should there be any restriction on cross holdings between two
MVNOs and between MVNO and an MNO in a service area?
Please comment on the nature and scale of restructuring.
Response: As suggested above that MVNO can be associated with only
one MNO, therefore cross holding amongst them should be
allowed; his holding in any other MVNO/MNO should not
exceed 10% in that licensing area.

Issue 16: What should be the FDI limit for MVNO?

Response: Same should apply as that in the case of an MNO I,e 74%

Issue 17: What should be the quantum of FBG and PBG for MVNO?

Response: Since MVNO is not responsible for spectrum, PBG

Should not be applicable, while quantum of FBG
Should be based on the same approach as adopted for
MNO.

Issue 18: Any other relevant issue you would like to suggest /comment.

Response: The Regulation and Govt policies , in the past, have taken into
Account the constraints in Spectrum availability, and business
Approaches of the Industry.Now, since the constraints are getting
Over, Regulation should aim at counter measures ,such as :

Government policies of “No Capping” implemented so far has

provided ample competition on the one hand and at the same time
it has resulted in the fragmentation of Spectrum usage in the hands
of the operator. This fragmentation of the Spectrum has resulted in
limited exploitation of the Spectrum resources. There is an
opportunity to correct the situation by revisiting the M&A guidelines
In the light of proposed MVNO policy so as to permit 2 MNOs to
pool their Spectrum allocation in a Licensing Area subject to an
already laid out overall limit and share of the extra capacity thus
generated can be mandated to be made available to MVNOs.,in a
consortium approach.

. Such a dispensation of permitting pooling of Spectrum resources

will help the Spectrum exploitation to society’s benefit and shall
undo the anomalies brought forth by fragmentation, in addition to
generating resources for the government kitty by way of prescribing
charges in respective pooling proposals. It may also require
appropriate Licensing and regulatory framework for the sake of
level playing field and to sub serve the consumer interests.