With a joint venture between Tata Teleservices and the Virgin group, finally, India gets its first MVNO, or mobile virtual network operator. Though Tata Teleservices (TTSL) terms it as a JV and Virgin Mobile would be TTSL's franchise, the Indian telecom industry is not ready to accept it as anything less than an MVNO. In other countries where Virgin is not a pure telecom service provider, it runs its business by becoming a virtual telecom operator-exactly the way it may function in India.

Virgin Mobile's entry into India has had different effects on customers, the existing telecom players and the telecom ministry. Indian customers expect different services from the British telecom giant. At the same time, the existing players, apart from Tata Teleservices, pushed the panic button. The GSM operator's association, COAI, has already raised a question on the legality of its entry in India, asking for a clarification from the department of communications whether Virgin has been issued India's first MVNO license. While India does not have a concept like MVNO as of now, the telecom secretary recently expressed that the government is not averse to MVNOs.

Business Path
Analyzing the deal closely, Virgin will act as a franchise of Tata Teleservices and resell its CDMA-based mobile services. However, the exact difference between an MVNO and a franchise is not clear.

But how is this MVNO going to help TTSL? There are three primary motivations for mobile operators to allow MVNOs on their networks. First, service providers often find it difficult to succeed in all customer segments. MVNOs is a way to implement a more specific marketing mix. Second, many mobile operators have the capacity, product and segment needs. And the third, MVNOs can help mobile operators target customers with specialized service requirements.

On the face of it, Virgin Mobile India does appear to be an MVNO: the company hasn't been allocated spectrum, yet it uses a mobile operator's pipe to deliver voice and value added services. They have also stated that Virgin is free to partner with other mobile operators. However, this is likely to boil down to technicalities-on how exactly an MVNO is defined under the Indian law.

Virgin Mobile has also made some tall claims on their connectivity, service and experience with their mobile service. But the question is, can it really make any significant difference in user experience? The answer is perhaps 'no' because Virgin India Mobile Service is in no way different from TTSL's mobile service. Virgin is using the same Tata platform that Tata Indicom is using. Therefore, any problem associated with the Tata Indicom network will also be with Virgin Mobile. Already, there are many complaints of Tata Indicom's poor connectively, coverage, call drop, slow speed of Internet, congestion, etc. Then how can Virgin Mobile claim itself to be free from these problems?

If this model becomes successful, the days are not far when non-telcos launch mobile service riding on existing operators' network.

Gyana Ranjan Swain
gyanas@cybermedia.co.in