News, views and commentary from the telecoms sector across emerging markets and developing countries worldwide

Friday, 13 March 2009

India: Aircel invests in expanded coverage; TRAI/DoT wrangles to hamper new MVNOS?

My most recent post here was a discussion about the prospects for MVNOs gaining traction in emerging markets. Specifically, I rounded up views about which of India or Africa (taken as a whole) would be first to see truly mass-market MVNOs.

Anyone betting on India may be disappointed to hear about potentially quite unhelpful disagreements between the country's telecoms regulator and Department of Telecommunications. One of these is a difference of views about the question of whether prospective MVNOs should be allowed to be hosted by more than one MNO in a given area. According to an Economic Times (India) article today, the TRAI position is that each MVNO should stick to a single network. The DoT has decided otherwise.

This, and other bones of contention, may delay the market entry of MVNOs. As the Economic Times article notes, while the Indian Government has already cleared the entry of MVNOs, it has not issued policy guidelines because of the DoT and the TRAI failing to arrive at a consensus on several important points.

The TRAI justification for wanting to restrict MVNOs to single operator tie-ups is built on a stated concern about further complicating mobile number portability. A DoT communication to the TRAI also stated that calculation of spectrum charges would also become difficult if virtual operators tied up with multiple MNOs "as each service provider has a different slab for calculating these levies (based on the number of customers they have)." The regulatory body, states the Economic Times article, has also expressed concerns about monitoring and and maintaining service records if MVNOs are allowed to tie up with multiple operators.

The TRAI has also taken issue with the DoT suggestion that each mobile operator should be allowed to share their networks with no more than two MNVOs. The article indicates that the feeling at the TRAI is that this would not work to attract a good number of MVNOs onto the Indian market.

When (and whether) MVNOs make a significant impact in India remains to be seen, then. One Indian cellco, however, is working hard to ensure that its own impact on the market is greatly increased.

­A Cellular News story today reports that Aircel, in which Maxis Communications of Malaysia holds a 74% stake, has announced plans to double its subscriber base and invest USD 5 billion in its network over the next three to five years.

Aircel is not currently among the giants of the Indian cellular area. According to the World Cellular Information Service, the company had just under a 5% share of the country's mobile subscriptions by the end of 2008. Thus far, Aircel has not extended its reach to all 23 of India's circles (regional markets). The Cellular News piece quotes the company's COO Gurdeep Singh as saying that following recent expansion of Aircel's coverage "by April-end, we will launch our services in rest of Maharashtra, taking the total number of circles to 18." Singh added that "Hyderabad is the 13th circle where we have launched our services and with this we have completed our southern footprint."

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