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How about service providers rolling out services without a network infrastructure and radio spectrum of their own? It certainly sounds like a lucrative proposition for mobile virtual network operators (MVNOs) who do not want to take the pain of managing infrastructure or fight for spectrum, which is a rare commodity. MVNOs simply want hassle-free service delivery, faster go-to-market, subscriber ownership, and customized point solutions.

For asset-based carriers, operational support systems and business support systems (OSS/BSS) pose several challenges in terms of maintaining network inventory, provisioning services, configuring network components, and managing faults, along with dealing with customers, taking orders, processing bills, and collecting payments. And since MVNOs do not own spectrums and network infrastructures of their own, they have business tie-ups with traditional mobile operators to buy minutes of use (MoU) for sale to their own customers.

Key Benefits
The major benefit for host players or mobile virtual network operators like TTSL is that they can broaden the customer base at a zero cost of acquisition. Mobile operators find it difficult to broaden their base in all segments. Also, many service providers have spectrum capacity, product, and segment needs in new areas like 3G. So the MVNO model is the best way for optimum network utilization. And, as TTSL stated during the launch of its association with Virgin Mobile, MVNOs can help mobile operators target specific consumer segments, like the youth segment, with specialized services. On top of these benefits, it provides business opportunities to communication solutions providers as well.

XIUS-bcgi, a player in the segment, identified a potential business in the MVNO model. It has plug-n-play services like XIUS VOISE for MVNOs, helping them escape the pain of managing the OSS and BSS.

Boon for Indian Telecom
Ever since the first commercially successful MVNO was launched by Virgin Mobile, UK, in 1999, and after its huge success (over a 4 mn customer base at present), the model was successfully employed by other telecos in the US and other countries. In fact, in March this year, Virgin Mobile made an entry into India in an alliance with Tata Teleservices on something similar to the MVNO model.

Once this joint venture becomes successful by delivering the promises it made, it will be an encouraging precedent for other non-telecom companies to venture into the Indian telecom market through the MVNO model.

Some other international MVNOs that were looking to enter India are Telekom Malaysia, Mobile ESPN, and ValueFirst. Also, Reliance Communications has expressed its interest to adopt the MVNO business model for its GSM foray in some telecom circles to expand its customer reach.

There are approximately 360 planned or operational MVNOs already existing worldwide. And scores of international MVNOs are expressing interest to enter into the Indian market. This provison of service delivery platform to MVNOs by convergent communication solutions providers like XIUS-bcgi, might create a separate market segment in the telecom industry. This new segment will possibly influence Trai's Rs 1,300 crore 'net worth' criteria for granting spectrum license. Now that the service delivery platform could be de-linked from network by services offered by host players like TTSL and communication solution providers like XIUS-bcgi, many small non-telecos will be encouraged to utilise the MVNO model to provide mobile services. This might force Trai to rethink its 'net worth' criteria and bring it down considerably, encouraging new players to operate in the traditional MNO model.

Kannan K
kannan@cybermedia.co.in