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DoT no to mobile virtual network operators

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Siddharth Zarabi New Delhi
The department of telecom has said the time has not yet come to permit mobile virtual network operators (MVNO) in India on the grounds that the country lacks sufficient telecom infrastructure.
 
It has also said no to the concept of "resale," under which bulk talk time minutes are purchased by an entity from a telecom operator and then sold to users in the form of calling cards.
 
Responding to the recommendations of the Ratan Tata-headed Investment Commission, the DoT pointed out that the present licensing regime does not support the concept of MVNO.
 
"Licencees are fully responsible for quality of service and security. The existing telecom licences already provide great flexibility by way of franchisee arrangements allowing them to offer many things which MVNO's currently offer globally," the DoT said.
 
An MVNO is a company that does not own a licensed frequency spectrum, but resells wireless services under their own brand name, using the network of another mobile phone operator.
 
The first such network was Virgin Mobile, launched in the United Kingdom in 1999. There are currently 200 panned or operational MVNOs globally. Countries like The Netherlands, Denmark, Finland and the US have many such networks.
 
The Commission had also made a number of recommendations aimed at local loop unbundling, a system under which the last mile copper network of an incumbent operator is opened up to a competitor, allowing him to offer Internet broadband services.
 
Citing the mixed experience of this globally, DoT said copper loop infrastructure was not a bottleneck in India since all access providers were permitted to lay copper in the last mile.
 
Blaming Indian operators for not laying enough copper cables (as doing so is far costlier than wireless connectivity) over the last decade, the department has saidcommercial decisions of operators should be market driven.
 
"A policy intervention to share the local loop is a disincentive for creating infrastructure.
 
Allowing unbundling will also come in the way of increasing broadband deployment in the country. BSNL and MTNL also do not have any spare cable pairs available for sharing with other operators," the DoT added.
 
On the recommendation to align levies and fees on telecom with international benchmarks, especially in the Asian region, DoT said a balance needed to be drawn between sectoral priorities and revenue needs.
 
"The present explosive growth in the Indian telecom sector vindicates the policy stand of the government. Further reduction and rationalisation in fees will be taken up at an appropriate time," it added.

 

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First Published: Aug 11 2006 | 12:00 AM IST

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