Videocon Telecom, which sold its spectrum in six circles to Airtel this year, now plans to offer pan-India mobile services, including 3G and 4G, in the next 6-8 months but as a virtual network operator (VNO).
“We are in final stage of applying for the Virtual Network Operator licence and expect to file application in a week. MVNO roll-out usually is very quick, generally it should take about 6-8 months depending on the number of circles,” Videocon Telecom CEO Arvind Bali said.
A VNO provides telecom services like mobile landline and Internet, but only as a retailer for full-fledged telecom operators such as BSNL and Airtel.
In March, Videocon Telecom sold its 1800 Mhz band spectrum in six circles for Rs 4,428 crore to Bharti Airtel. However, it still holds 2G spectrum in Punjab.
“One of the key reasons for us to exit the mobile telecom space earlier was us being predominantly a 2G player and hence being technologically outdated. The telecom space in India and worldwide is fast adopting to newer technologies i.e. 4G,” Bali said.
He said that while by upgrading Videocon’s network to a 2.75G EDGE Network, the company was somewhat able to compete in market against 3G players, but fast shift towards 4G would have made it obsolete and really uncompetitive.
“The two key factors that we feel will be strong for our comeback will be us able to provide 4G/3G data to our customers, which was earlier a limitation for us, and hence we never had a level playing field with others,” he added.
“Providing newer generation of technology would have mean lacs of crores of investment in spectrum and infrastructure, which we were not prepared for, and hence we decided to exit the space,” Bali said.
The company at present has pan-India internet service provider licence and also provides 2G mobile services in Punjab circle.
With VNO licence, it plans to first upgrade mobile data services in the state and then expand to other circles.
“We plan to launch services in a phased manner, our first and foremost priority will be Punjab where we already have a 3 million subscribers base (approx 10 per cent market share), followed by Haryana, Gujarat, MP and Delhi,” Bali said. Videocon will even offer roaming services to its customers.
“Since Videocon Telecom has already been in the telecom space and has the required infrastructure including billing platform (IN), service delivery platform, VAS platform etc, and to top it all, a team of telecom professionals, we feel that the roll-out period for us would be 3-4 months,” Bali said.
He, however, did not disclose name of any operator the company plans to partner with for the services, saying it is at very initial stage and it will be premature to mention any name.
“We are in active discussions with more than one TSP (Telecom service provider) for bulk buying of Airtime & data (incl 4G/3G), but given the nature of the deal and business dynamics, I think at this point in time it will not be possible for us to share the name of the telco(s). The way MVNO model operates worldwide, we may have more than one MVNO partner,” Bali said.
The Department of Telecom (DoT) in June released licence guidelines for virtual network operators, opening the doors for new class of players which will act like retailers for telecom service providers.
VNO will use underutilised telecom infrastructure of national telecom operators. This will help reduce cost of ownership on telecom companies to provide telecom services at more affordable rates.
For obtaining VNO licence, companies need to pay a one-time non-refundable entry fee for authorisation of each service they want to provide and for each service area where they wish to operate.