The Telecom Commission has finally agreed to TRAI’s recommendation for virtual network operators (VNOs) in India, clearing the way for companies to offer voice and data services without actually owning any spectrum. A brand new type of unified license specifically for VNOs will be issued by the government within a few weeks, pending the Telecom Minister’s stamp of approval.
To recall, reports about the introduction of the virtual network operator system in India had last surfaced all the way back in July 2015. A VNO basically acts as a middle-man between a provider and a customer. It buys bulk quantities of spectrum from various players and uses the bandwidth to offer its own services to consumers, often at a cheaper rate.
The model benefits all the parties involved. Financially-stressed network companies will have access to a new source of revenue without having to invest in marketing and operational costs. VNOs can take advantage of multiple sources to offer plans in areas where players can’t reach. The brands could even buy voice services of one and data services of another.
Finally, consumers stand to gain from the system as well since it will likely make services like wired broadband more cost-effective. While VNOs are allowed to sink money into setting up infrastructure such as mobile towers, it is not permitted to sign deals to connect infrastructure built by it with another telecom operator.
As per PTI, the new VNOs could be a blessing for state-owned BSNL and MTNL. The two currently use a revenue-sharing model to reduce capital expenditure, so the new system should be ideal for both.