Founded in 1999

STAKEHOLDERS: Maxis Communications(74%) Apollo Hospital (26%)

Headquartered at Gurgaon Business Delivery Innovation award 2010 at fourth Global Telecom Business Innovation Awards held at London (UK). Indias 5th largest GSM Mobile service

OBJECTIVE

Secondary Research on MVNOs MVNO models currently in Europe and US MVNO Technical Characteristics MVNO Regulation in India Strategies adopted globally

Duration: 45 days

A Mobile Virtual Network Operator (MVNO) is a mobile operator that does not own its own spectrum and usually does not have its own network infrastructure An MVNO is a business model that emerges when the traditional mobile value chain is ruptured.

Total MVNO market 3% of Total Mobile Market Currently, over 400 active MVNOs operated by over 360 companies Western Europe 40% of the worldwide MVNOs, Netherlands and Belgium represents the highest share Hong Kong - highest MVNO penetrated Asian market with 7,20,000 customers, i.e. around 7.5% market penetration Govt. of India recently accepted TRAI's proposal for the entry of MVNOs in the domestic market

Fifth-largest telecom network in the world; second largest among the emerging economies after China The large untapped potential in Indias rural markets The immense potential for 3G, reflected by the 30-40 per cent annual growth in VAS in other countries Youth segment 50% of Indias population

Regulatory Position Force MNOs to share network

Examples 1) Hong Kong 2) Norway

Relevant Regulations Example network: Hong Kong 1) 40% network capacity dedicated to MVNOs 2) No limit to number of MVNO licenses 3) Uniform wholesale pricing regardless of MVNO Example Market: Australia 1) Mandatory sharing of networks enforced on operators with significant market share 2) Wholesale pricing on a cost plus basis with regulated margins

Number of MVNOs 1) Hong Kong: 7 2) Norway: 8

Facilitate launch of MVNOs

1) 2) 3) 4) 5)

Australia Belgium France Denmark UK

1) 2) 3) 4) 5)

Australia : 20 Belgium : 15 France : 17 Denmark : 11 UK : 18

India

Regulatory Position Indifferent to MVNOs

Examples 1) 2) 3) 4) Austria Canada Japan Portugal

Relevant Regulations Example Market: Japan 1) No requirement on MNOs to open networks to MVNOs 2) MNOs allowed to price discriminate based on its own business objectives Example Market: Argentina 1) Large number of MNO licenses granted to make market unattractive for MVNOs 2) Stringent roll out obligations to MNOs make MVNO entry difficult Example Market : Italy 1) MNO not allowed to host MVNO till 2011 as part of 3G license agreements

Number of MVNOs 1) 2) 3) 4) Austria : 4 Canada : 5 Japan : 2 Portugal : 2

Discourage development of MVNOs

1) 2)

Bolivia Argentina

1) 2)

Bolivia : 1 Argentina : 0

Prohibit MVNO

1) 2)

Greece Italy

1) 2)

Greece : 0 Italy : 0

MVNO business strategies can be divided into five main groups:

Low price Narrow focus Service differentiation Service reselling International clustering

From the case studies, Understanding: MVNOs can gain competitive advantage through

Competition on basis of price Service differentiation

Two Basic types: Reseller MVNO Model Full MVNO Model

Customer interface Leveraging customer relationships Strong brand Sales and distribution channels

The main advantage of the Reseller approach is that market entry is relatively straightforward because the model is simple to implement and attractive to network partners (that is the host MNO).

A Full MVNO will maintain Core network and service platforms

Own International Mobile Subscriber Identity (IMSI) codes

(SIM) cards

The MNO Perspective

The factors which are driving MVNO success stories globally:

Maturity of the telecom market in respective country (based on teledensity) Existence of Mobile Number Portability (MNP) Existence of 3G services Consolidation of the telecom market Current charges of services for the end-user