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Youth, lifestyle, enterprise and data-driven segments would be the most attractive opportunities for an MVNO in India, according to Capgemini, which provides consulting, technology and outsourcing services.

The Indian market, despite lowest mobile tariff word wide, offers a huge opportunities for MVNO. The Department of Telecommunications (DoT) nod to MVNO business in India will help global teleco's make low risk-low cost entry into Indian market, the largest telecom market in word after China.

The relatively relaxed licensing terms along with lower license costs ($1.6 million for a nationwide license as per TRAI recommendation ) facilitate the easy entry. The absence of roll out obligations or any mandates on coverage would allow “cherry-picking” of the markets and target segments by the players.

Youth Segment

The youth population in India, comprised of the 15-24 year age group, stands at about 224 mn and is expected to grow further to around 238 mn by year 2015. With more than 27 mn youth belonging to households with an average annual income of $15,000 and above, this is likely to be a segment which MVNOs can target aggressively. Capgemini estimates that the market for mobile services for youth is likely to be a $15.4 bn opportunity by 2010.

Premium Segment

Operators in India have positioned themselves as mass market players, thereby depriving potentially high-end customers from any sense of exclusiveness. The services currently offered lack premium offerings such as preferential customer care, higher guarantees on QoS, premium bundled handsets and other personalised services.

There is a sizable population in India which could potentially be targeted with such premium services. There are currently more than 7 million people in households with annual income between $23,000 and $45,000. This segment is likely to be attractive for the higher ARPU it promises. For example, the ARPU from the more expensive PDA users in the country is 11 times the ARPU from a CDMA user. Capgemini estimates the market for this segment to be worth around $2.5 billion by 2010.

Enterprise Segment

The spending on mobile communication for enterprises in the Indian market is expected to grow to $2.7 billion by the year 2010. A number of these enterprises have requirements in the telecom space that are not core operator skill sets, such as managed mobility, M2M services and mobile enterprise applications.

ICT service providers could launch MVNOs on similar lines as Embarq and Earthlink, which target the business and professional segment, and provide additional enterprise services for differentiation. Particularly, global telcos present in India in the enterprise ICT services space could expand their service portfolio by offering enterprise mobility services as MVNOs.

Heavy Data Usage Segment

The data and content market in India is still in the process of maturing. However, the market is expected to grow at around 44 per cent CAGR by 2010, to become worth around $2.7 billion. The current Indian market for data is constrained by the absence of 3G services. However, the auction of 3G licenses by the end of 2009 is likely to alleviate the problem.