Govt open to airtime sale under a different brand

The government today said that it was open to allowing Mobile Virtual Network Operators (MVNOs).

MVNO is a system through which companies buy airtime from mobile players and sell it under their own brand names.

"We are certainly open to MVNO. There is a possibility for it," Telecom Secretary Siddhartha Behura said on the sidelines of a Mahanagar Telephone Nigam Ltd press conference.

Behura's comments are significant considering the raging controversy over the announcement by Tata and Virgin for launching Virgin mobile services in the country.

The Cellular Operators Association of India (COAI), the lobby for GSM players, has shot off letters to Behura saying this looks like a backdoor entry into the MVNO space. The Tatas have denied the charge saying it is a franchising brand agreement.

On whether the government would probe the deal, Behura said they were still looking into it and dismissed rumours that it had been put on hold by the Department of Telecommunications (DoT).

"We have asked them for clarifications about the deal. We will look into their response. They can go ahead provided they do not violate any licensing condition," said Behura.

About Telecom Regulatory Authority of India's (Trai's) guidelines, Behura said the M&A guidelines would be in line with the regulator's recommendations.

In August 2007, Trai had recommended that in case of mergers and acquisitions, a crossholding of 10 per cent would be approved through the automatic route and from there up to 20 per cent would be approved on a case-to-case basis.

Regarding 3G spectrum allocation, Behura said availability of spectrum was being studied.