The department of telecommunications (DoT), on Wednesday, permitted Mobile Virtual Network Operators (MVNO) to provide services in India. MVNOs are companies that do not own spectrum or licence to offer mobile services. They lease radio frequency from mobile service providers such as BSNL, Airtel, Vodafone and Idea and sell services under their own brand.

This will benefit Oxigen, a mobile prepaid company. It has about 50,000 mobile recharge centers in India and has a strong brand in this segment. Virgin is already reselling Tata’s airtime in India and aspires to become an MVNO.

“The detailed guidelines for MVNO shall be issued by Department of Telecom (DoT) after it receives response from telecom regulatory authority of India (TRAI) on some issues,” said DoT in a press release.

In countries like UK, MVNOs are very popular. The first commercially successful MVNO in the UK was Virgin Mobile, which launched its services in 1999 and has over 4 million customers in the UK. There are a large number of MVNOs in the USA.

In India, Virgin mobile is already selling mobile services under its own brand in association with Tata Teleservices. However, it is not categorized as MVNO operator.

Sources said that the telecom commission wants MVNOs to pay a licence fee of Rs 85 crore for all India operations. The maximum entry fee for Metro and Circle A circles would be Rs 5 crore, Rs 3 crore for Circle B states and Rs 1 crore for Circle C states. The Commission has set the floor price at Rs 1 crore for Metros and Circle A states, Rs 50 lakh for B Circle states and Rs 25 lakh for C Circle regions.

For instance, for Delhi licence, MVNOs will have to pay only Rs 5 crore even though 10 per cent of the entry fee paid by the unified access providers would work out to be Rs 17 crore. In the case of Jammu & Kashmir, virtual players will have to pay Rs 25 lakh despite the 10 per cent working to be just Rs 20 lakh. Telecom commission has sent it to TRAI for its recommendations.