Telecom Regulatory Authority of India

RecommendationsOnMobile Virtual Network Operator (MVNO)

New Delhi6 August 2008Mahanagar Doorsanchar BhawanJawahar Lal Nehru MargNew Delhi – 110 002web-site:www.trai.gov.in

Telecom Regulatory Authority of India Recommendations on MVNO

Table of Contents

PageExecutive Summary

11 Background 22 MVNO Types, Need & Timing for Introduction 63 Regulatory and Licensing Issues 204 Summary of License Conditions and Agreement Points 495 List of Recommendations 61

Annexure

I Letter from Department of Telecom 71II Issues Consulted 72III MVNO Definitions 75IV Entry fee, Annual Licence fee, Networth and Paid up equitycapital requirements for UAS licence76V Annual Spectrum usage charges for Mobile Service Providers 77VI Spectrum allocation to Mobile Service Providers 78VII UAS licence conditions 84VIII International Scenario 89

Glossary

105

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Telecom Regulatory Authority of India Recommendations on MVNO

PREFACE

The growth in telecom sector, particularly of wireless subscribers hasbeen exponential. The Authority’s policy to encourage competition, ensure levelplaying field and maintain technology neutral stance has had a significantcontribution to the success story of telecom sector. The Indian Telecom Networktoday is the second largest network in the world after China. As of 30

June 2008there are more than 325 million telephone connections in the country of which286 million are mobile connections. Over 8 million mobile connections are beingadded every month.To maintain such exponential growth, the challenge is to optimally utilizethe available resources while ensuring competition and availability of services ataffordable price. The Authority also believes that the regulatory framework in thecountry should not preclude the introduction of any service.The introduction of Mobile Virtual Network Operator (MVNO) is seen as anatural progression towards enhancing free market principles and contributing tothe efficient use of existing telecommunication infrastructure. Generally MVNO isan entity that provides mobile phone service but does not have its own radiospectrum nor does it necessarily have the entire infrastructure required to providemobile telephone service. An entity that has the radio spectrum and the entirerequired infrastructure to provide the mobile service is Mobile Network Operator(MNO). MVNOs operate through commercial arrangements with licensed MNOand buy bulk minutes of traffic and resell them to their own subscribers in theirown brand.MVNO model has gained popularity in the last few years. There arecurrently about 360 planned or operational MVNOs worldwide. Countries

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