NEW DELHI: To instill greater competition in the telecom sector, the department of telecommunications (DoT) is working on a new structure for virtual network operators (VNOs).
Virtual network operators, who function as resellers of bandwidth and services of licensed telecom operators, are currently permitted. However, their operations have not been successful. Therefore, the DoT is looking at easing certain restrictions so that they are able to find more takers among the telecom operators.
For instance, the DoT wants to allow VNOs to market services of more than one operator, which is currently not allowed. The government believes, this way, weaker operators like BSNL and Vodafone Idea will be able to better market their services and compete in the market, especially in the enterprise segment. This way, the fear of a duopoly – Bharti Airtel and Reliance — Jio who control 70% of the subscriber market share – can also be checked.
A consultation paper in this regard has already been floated by the Telecom Regulatory Authority of India (Trai). While certain industry bodies have endorsed the idea of allowing VNOs to market services of more than one operator, the telecom operators have voiced their opposition to any such move.
“The mobile services market has become highly consolidated and it needs more competition. It needs the positivity of a VNO to arrest the situation where two out of the four operators are steadily losing market share, thereby leading to a market failure in the MVNO (mobile virtual network operator) market segment,” industry body Broadband India Forum (BIF) has written to Trai.
According to BIF, with the market being dominated by two large operators, both quality and affordability of service is getting affected, besides the niche segments are not being addressed. Allowing VNOs to resell services from different operators will be key in giving choices to end consumers, especially enterprises, given that quality of services by telecom operators is not fixed and varies over time and within the same licensed service area.
Tata Communications, which owns a pan-India UL (unified licence)-VNO, shares BIF’s views and has said that easing restrictions for VNOs will encourage innovation in services, billing, service delivery and service quality. “VNO can combine wireline and wireless access service options and better meet the diversity needs of end customers. This is critical for enterprises and businesses to ensure service availability and uptime for their businesses and be able to service their end customers,” said Alka Selot Asthana, vice president and head regulatory affairs at Tata Communications.
According to Asthana, the scope of VNO licence should also be amended to pave way for VNOs to resell 5G services of its partner or parent telecom operator. Besides, Tata Communications has also urged the government to enable VNO licensees to offer private 5G service to its enterprise customers.
“Lifting the regulatory restrictions on multi-parenting could make network maintenance more decentralised, allowing for quicker response to downtime,” said Tapan K Patra, director of Association of Competitive Telecom Operators.
However, the telecom service providers are opposed to any such move.
“Due to these shared elements and more and more convergence, parenting with different network service operators (NSO), one for wireline and another for wireless will create complexity at keeping the services completely separated and it would also lead to difficulties in revenue accounting,” Reliance Jio has written to Trai.
“Allowing the same VNO to parent with different NSOs – one for wireless service and another for wireline service will cause confusion over numbering resources. Indian telecom service providers continue to face pressure on numbering resources despite constant tightening of its allocation criteria,” Bharti Airtel said.
According to Airtel, all the areas, be it teledensity or penetration of services or connectivity to enterprise services, are well covered across India in a technology-neutral manner, whether through wireless or wireline. Therefore, it sees no justification to challenge the basic licensing structure when there is no problem to solve.
According to Vodafone Idea, if VNOs are allowed to have multiple telcos as parent, it will cause irreparable and irretrievable loss to competitive structure in market and would be counter-productive.
Source: The Financial Express
