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    What’s stopping VNOs from succeeding in India? Stakeholders debate during TRAI’s Open House Discussion

    Despite the recommendations given by the Telecom Regulatory Authority of India (TRAI) in 2016, no wireless virtual network operator (also called mobile virtual network operator or MVNO) has been able to take off in India, Rakesh Kumar Mehta from the VNO Association of India said during TRAI’s open house discussion on May 8. The discussion was focused on a consultation paper released by the regulator in February this year, which sought to examine whether virtual network operators (VNOs) should be allowed to enter into agreements with multiple telecom operators to provide their services. 

    Mehta argued that there is a need for serious consideration of why MVNOs are unable to operate and only then TRAI and the Department of Telecommunications (DoT) prescribe a framework that will work and alleviate the issues faced by MVNOs. Mehta was not the only participant in the discussion to argue in favour of a multi-telco agreement, others like Debashish Bhattacharya from the Broadband India Forum also suggested the same adding that for some VNOs, it has been eight years since they received a license but have still been unable to start their services. 

    “Many of them are facing challenges because of the NSOs [network service operators], the operators who are not forthcoming in providing network access to the VNOs,” he said, adding that while the focus of the consultation is multi-telco agreements, VNOs have been unable to enter into agreements with a single telecom operator. He suggested that there is a need for suitable regulatory interventions to ensure that a telco ties up with at least one MVNO to provide wireless access services. 

    Why is there a need for multi-telco arrangements for VNOs?

    It will increase competition: “There are hardly two operators who are providing the 5G service, three operators who are providing the 4G service. The market is highly concentrated for two operators,” Deepak Arya from Tata Communications said. While Arya didn’t mention the names of these two operators, as per TRAI’s monthly telecom subscription data, Reliance Jio and Airtel are the two biggest telecom operators in the country. “There should be a regulatory intervention to let VNOs come up and bring more competition to this sector,” he explained. 

    The Cellular Operators Association of India (COAI), disagreed with the argument about lack of competition. “The very fact that the prices are what they are indicates competition,” it said. Bhattacharya argued that the need for competition is not for price reduction but to provide better quality services and to meet the needs of certain niche segments. Such segments cannot be served by the large telcos simply because that does not make business sense for them. 

    “If there is an area like Chandini Chowk in Delhi, which is a very congested area, and if I am a resident there and I want to provide services, I buy bulk bandwidth from the TSP and then provide the niche service to that particular area. I become the local MVNO in that area and provide the service in this respect, thereby meeting the specific need of the customer sitting in Chandi Chowk. At the same time, I’m able to also make sure that I’m giving him the correct quality of service that he requires, the attention for which he may not get from a larger telco,” he pointed out. 

    Consumer Care Society also chimed in, about the low rates discussed by COAI. It added that the reason for these low rates is not because of market competition but because consumers cannot afford to pay more. “If they [telcos] raise the rates, then you will find many consumers are either reducing the volume of consumption or they are downgrading to a lower plan,” Gopal Ratnam from the Consumer Care Society explained. 

    It will improve the quality of service for customers: Bhattacharya explained that the quality of service provided by a telecom operator is not uniform and varies even within a specific licensed service area. “VNOs are required, therefore, to have the freedom to choose between different operators or NSOs so that they can provide the uniform quality of service to their end consumers,” he mentioned. 

    Arya mentioned that VNOs depend on providing good quality service to attract customers and separate themselves from telcos. “They should be given a chance to have a good quality of service if it can be provided by parenting to two NSOs,” he argued.

    VNOs don’t pose a threat to telcos: “We believe that the justification for that is that volume of business and revenues earned by the VNOs is very small as compared to the NSOs, and therefore, they don’t form any competition to the NSOs or the large NSOs,” Bhattacharya argued. 

    Arguments against multi-VNO arrangements: 

    Would pose issues in lawful interception: 

    Access services need numbering and a unique identity, UK Srivastava from Reliance Jio pointed out. “And under the prevailing SDCA-based numbering assignment methodology, it would be difficult to differentiate the NSOs in the case of lawful interception,” he said. COAI agreed with Jio adding that in a multi-telco arrangement, one wouldn’t know what traffic is going to which parent telco at what time. To this, Srivastava responded that new entrants hoping to serve both wireless and wireline markets should apply for a unified license for telcos instead of going the VNO route. He further mentioned that telecom companies are moving towards convergence, so it would be very difficult for them to separate the wireless and wireline parts of communications and parenting a VNO.

    Speaking about the numbering system in place, Arya mentioned that there is a separate numbering scheme for wireless and wireline services. As such, he argued that VNOs could at least partner with one telco for wireline and another for wireless services. Coming to the difficulties surrounding lawful interception and monitoring, Arya said that currently, telcos are taking care of any request for lawful interception. “Right now, all these are whenever any response is being received from LEA [law enforcement agency] or something, so that is being forwarded to the NSO only. In fact, even LIM [lawful interception and monitoring] authorities are coming to NSO directly. So that is not actually a no-brainer, and this can be taken well care of, even in the case of multi-parenting also,” he mentioned. 

    What is the need for discussing multi-parent agreements? 

    “We don’t find anything in the consultation which is giving the reasons that have necessitated this consultation, why is there a need for a change? And what would be the impact and implications of this change that is being sought to be discussed in the consultation paper?” Anjali Hans from Vodafone Idea said. Hans explained that Vodafone Idea has argued across multiple consultations that the authority should “carry out the best practice of regulatory impact assessment on why a change is proposed, what are the reasons for why such a proposal is being considered, and the impact of that on not just the existing operators, but also the entire ecosystem.”

    In TRAI’s previous recommendations on VNOs, the authority had limited multi-telco agreements to category B VNOs. These are VNOs that provide direct inward dialling (DID)— a service that lets businesses set up phone numbers that send callers straight to a department or individual. Hans said that the authority had explained in its recommendations why the multi-agreement setup was limited to this category since applying the same to other VNOs could lead to operational complexities. “Why that decision is sought to be changed or being opened up for discussion in the present consultation is something that we would like to understand,” she mentioned.

    Multi-parenting is not commercially viable:

    “Technically, working with the two operators together is a very complex thing, but globally, they [MVNOs] say they have got the option to parent with another NSO anytime. Whenever there’s a commercial agreement with one operator is over, then they can switch to another operator. This is the facility available,” Mehta stated, speaking in the context of a member of the VNO Association of India which is present in 32 countries. Mehta’s point was limited to the lack of commercial availability for multi-telco agreements for wireless services. 

    Multi-parenting will make it hard to track quality issues:

    “If you multi-parent, it will be very difficult to understand where the problem is coming up to a subscriber,” COAI said. 

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    The post What’s stopping VNOs from succeeding in India? Stakeholders debate during TRAI’s Open House Discussion appeared first on MediaNama.

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