I’m excited about TRAI’s decision about allowing MVNOs
A Mobile Virtual Network operator is one that can offer mobile phone services without being licensed radio spectrum (read more about MVNOs in Wikipedia). They operate by buying airtime from radio spectrum licensees, but market the mobile service under their own brand. The reason why I’m excited about MVNOs is because its going to be good for the Indian consumer in two ways:
- It’s going to spur further competition, which means possible even lower prices, and greater service innovation
- It’s going to lead to the creation of a number of brands that will attach themselves to specific segments of the population, providing more tailored services based on that segment’s need
I think that the second point is an interesting one. Given the diversity of the Indian Market, culturally and economically, we might find a number of brands coming up. The Farmer’s Network, anyone? I think that this might drive further penetration of mobile phones - great news for everybody, including startups in the Value Added Services (VAS) space.
Virgin UK is a good example of an MVNO that has successful targeted a demographic and tailored its services according to its needs: it focuses on reaching out to the younger crowd - high school and college students. It has a number cheap text heavy plans (the preferred mode of communication for the target market). Based on their TV spots in India, I wonder if Virgin is looking to target the same group in India.
In an interesting side story, I read a post by Ashish Sinha in pluggD.in on how the Virgin-Tata joint venture (JV) seems to be under strain. Before MVNOs were cleared, many incumbents were objecting to the JV, calling it an MVNO. When Department of Telecom (DoT) finally declared that it wasn’t an MVNO, (now that MVNOs have been allowed), Virgin wants to part ways!
Anyhow, I’d take this opportunity to start investing in mobile phone operators the next (if) time the market drops - MVNOs are going to probably help drive volumes
Image credit: Techshout.com
Tags: DoT, Finance, Investment, Investments, Regulation, Regulatory, Telecom, TRAI
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