Telecom Commission Clears Entry of Virtual Network Operators

Clearing the way for the entry of telecom service retailers, inter-ministerial panel Telecom Commission on Monday approved long-pending proposal on virtual network operators, which will offer voice and data services under their own brands without owning network or spectrum.

"The Commission has approved Trai's recommendation on Virtual Network Operators after including clarification it provided. It will need Telecom Minister's approval. A new licence will be issued UL VNO for this. It should be implemented within few weeks," an official source said.

"VNO will be able to offer all telecom services provided by a telecom operator with which it has partnered. It can sell services of more than one operator," the source said.

A VNO leases bandwidth from various telecom operators to provide voice and data services to customers. VNOs would offer all telecom services permitted under Unified Licences - permits that were issued in 2013. These players are expected to reduce marketing and sales costs of telecom companies struggling in the sector, besides sharing some operational expenses, too.

"VNO will be able to invest in setting up mobile towers and other elements in network required for providing services. However, it will not be able to sign deal directly to interconnect infrastructure laid by it with other telecom operator," the source said.

These players may also offer some relief to telecom PSUs, BSNL, and MTNL, which have already adopted a revenue-sharing model focusing on reducing capital expenditure. However, these companies will need to change their old licence to Unified Licence.

"VNO will be able to integrate service[s] and offer [them] to the customer as it wants. There will be no limit on integration and offering of services from licence or government that will be available shortly. VNO on its own will be free to use technology required for offering various services," the source said.

In case a VNO has partnered with multiple service providers, then it can offer voice call service of one and data service of other player.