The Telecom Commission has recently allowed mobile virtual network operators (MVNOs) to enter the Indian telecom industry. The move is likely to create new opportunities in the market, promising a win-win situation for stakeholders.
Besides enabling new players to enter the telecom market, the decision has opened up a potential revenue stream for the incumbents who have over the years made mammoth investments in infrastructure, spectrum and fibre. They can now lease these assets to MVNOs, who will ensure a wider service reach and adoption, particularly in rural areas. State-run BSNL and MTNL stand to gain significantly as their huge infrastructure assets are lying underutilised. Meanwhile, for relatively smaller telecom operators, partnering with MVNOs can be a key strategy to survive the competition prevailing in the market.
The key role of MVNOs is further underlined in the backdrop of the growing adoption of 3G/4G services. These players can contribute significantly to increasing 4G penetration and improving the utilisation of available 3G spectrum.
On a broader level, adding MVNOs to the value chain will bring in efficiencies into the industry as infrastructure sharing is at the heart of this model. This will also reduce service delivery costs, which will, in turn, bring down prices for end-customers and enhance service adoption.
However, it may not be smooth sailing for MVNOs in India. Industry experts believe that the Telecom Commission’s decision has come a little too late. The industry is already in the consolidation phase, a trend that has gained traction along with approvals for spectrum sharing and trading. In addition, the spectrum crunch faced by most operators leaves little room for sharing bandwidth.
While it will be interesting to see how MVNOs change the Indian telecom landscape going forward, they have surely raised the hope of achieving service ubiquity across the country, which will give a big push to the government’s Digital India goals.
