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An MVNO does not have its own switching equipment and offers mobile services under its own brand using facilities of other operators.
If Nokia and Ericsson manage to obtain licences, it will be a major departure from their business verticals. Nokia is known as a handset maker and Ericsson is an equipment vendor.
Last week, the government accepted the recommendation of the telecom regulatory authority of India (Trai) for license MVNOs.
A senior official of the department of telecommunications (DoT) told Financial Chronicle that Nokia, Ericsson and some other foreign companies were interested in getting a foothold in the Indian mobile services market.
“Their presence in hardware will give Nokia and Ericsson an edge in getting into the market,” he said.
A person close to the development said Nokia was in talks with NTT DoCoMo of Japan to launch MVNO services in Japan. With the Indian market opening up wider, “the handset maker is eying the Indian market just as it is eyeing Japan”. “This will offer Nokia an edge to be present in the entire value chain, from handsets, network equipment and operator service,” he said.
He said that Ericsson had also approached DoT to brief officials on its MVNO plans.
An email sent to both Ericsson and Nokia went unanswered.
Others that have shown interest in starting MVNO services in India include Telekom Malaysia, Mobile ESPN, BT (formerly British Telecom) and ValueFirst. BT, Verizon and France Telecom were among the companies that had earlier asked Trai to open this segment.
An MVNO gets into commercial arrangements with licensed mobile operators by buying bulk time from them and reselling it to subscribers. It does not have its own licensed frequency – which is allocated only to regular service providers against huge licence fees.
So, the licence fees paid by an MVNO is also less. It is learnt that DoT has decided to peg the entry fee for MVNOs at a maximum of Rs 85 crore for a pan-India licence. The maximum entry fee for metro and circle A states is Rs 5 crore, for circle B Rs 3 crore and for circle C Rs 1 crore. The telecom commission had set the base fee at Rs 1 crore for metros and circle A; Rs 50 lakh for B circle and Rs 25 lakh for circle C.
Detailed guidelines for MVNOs are likely to be announced next week after receiving Trai’s responses.
