COAI sends another letter to DoT on Virgin Mobile

The controversy surrounding the UK-based Virgin Mobile's foray into Indian market is showing no signs of relenting, with the Cellular Operators' Association of India (COAI) seeking a "further clarity" on its operations.

The GSM operators' body has shot off a letter to the Department of Telecommunications (DoT), the third one since Virgin Mobile launched its services on March 2, 2008, alleging that the UK-based company is offering a full range of mobile services.

Earlier, the issue had kicked up storm with the COAI alleging that the UK-based company was offering Mobile Virtual Network Operator (MVNO) services.

An MVNO service provider does not own spectrum or infrastructure, but takes this from existing operators on lease. However, this is not permitted in the country.

According to COAI, Virgin has mentioned on its website that it offers a "full range of mobile services, including sale of handsets, tariff plans, value-added services (VAS) and after-sales support".

The launch of these services and the so-called franchising arrangement being used to roll out these services emphasise the need for clarity on the regulations applicable to MVNOs, COAI said.

"Virgin Mobile India claims to be a franchisee of Tata Teleservices, offering in India the 'Virgin Mobile' brand of services of Tata Teleservices. It is well known that the brand Virgin Mobile belongs to the Virgin Group of companies based in the UK. It is equally well known that the mobile services that have been launched in India by Virgin Mobile India are the same services that the Virgin Group already offers as an MVNO in other parts of the world under the same brand," it said.

COAI said that it is not against the entry of MVNOs in India. However, to ensure a level playing field, it is imperative that comprehensive guidelines be issued for the provision of mobile services by MVNOs.

"Backdoor methods, which have the effect of subverting policy, must be avoided. There should be no double standards and the policy should be clear to one and all," COAI said.

In the context of Virgin Mobile, the issue obviously is whether the so-called franchising arrangement between Tata Teleservices and Virgin Mobile results in a partnership or creation of a third party interest that is in favour of Virgin Mobile.

COAI also wanted DoT to provide the details of Virgin Mobile brand's ownership and whether the company had the licence to offer the services in the country.

It has also sought information whether Tata Teleservices is paying any fees or royalty to the Virgin Group for use of the Virgin Mobile brand in India.

The association had earlier written two letters on February 27 and March 3, while the DoT called a meeting of service providers on March 14 to discuss the issue.