3G, Finally?

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Private operators in India no longer have to wait for the never-happening 3G auction. They can launch their services through MTNL franchisee model since they can do so under their own brand now.

While the private operators in the country are yet to get spectrum for 3G launch, the ones who go through MTNL will be able to launch their services under their own brand. Not just MTNL, even BSNL is likely to go for franchisee model. So a third operator can take franchisee of MTNL in one circle and BSNL in another circle and launch its 3G services under its own brand. While MTNL will provide the infrastructure and of course the spectrum, the rest of the operations will be carried out by the franchisee.

MTNL's Expression of Interest (EoI) seeks proposals for providing 3G services to customers by Indian, global, subsidiary or JV companies as a franchisee of MTNL in Delhi and Mumbai on exclusive revenue sharing basis. MTNL's franchisee model is similar to a MVNO model.

Last year, BSNL had invited bids from partners to provide distribution of pre-paid services, including WiMax-based services on franchisee model. The agreement was offered on a revenue sharing basis. BSNL is also likely to go for franchisee model for its 3G services.

Franchisee model is gaining momentum. For instance, Digivision is promoting its own brand Myway though it is working with BSNL for IPTV.This is a a new trend since big telcos are looking at the returns of their investment.

MTNL as well as BSNL decided to go for franchisee model after they failed to get subscribers for their 3G services. The incumbents had the advantage over the private players and launched the services in January this year. However, they failed to cash in on their early bird advantage.

As of now, MTNL has around 500 subscribers for its 3G services and BSNL has fared somewhat better with around 8,600 3G subscribers in 76 cities.

It remains to be seen whether MTNL's proposition will inspire private operators to launch 3G services through its franchisee model. However,clearly, it is going to be win-win for end consumer who might finally see some action on the 3G front.