Government issues licence guidelines for virtual telecom operators

New Delhi: The Telecom Department today released licence guidelines for virtual network operators, opening the door for new class of players which will act like retailers for telecom service providers.

"After considering the recommendations of Trai on VNO, the government has decided to grant Unified Licence VNO (UL VNO)," DoT said in the licence guidelines.

The Virtual Network Operators will be entities providing telecom services like mobile landline and internet but only as retailer for full fledged telecom operators such as BSNL, MTNL and Airtel etc.

The entry of VNOs is expected to push down cost of providing telecom services for companies and even give them room for cutting down tariffs.

"VNO shall use underutilised telecom infrastructure of national telecom operators. This will reduced cost of ownership on telecom companies to provide telecom services at more affordable rates," internet firm Bluetown's Country Managing Director Satya N Gupta said.

For obtaining UL VNO, interested companies will 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.

"The total amount of entry fee shall be subject to a maximum of Rs 7.5 crore," the guidelines said.

The UL VNO licence will be issued with validity period of 10 years but the duration can be reviewed after 3-4 years depending on technological developments and experience.

VNO will be able to offer all telecom services provided by a telecom operator and will have to pay fee to government accordingly with which it has partnered and will be able to sell services of more than one operator.

"VNOs are treated as extension of Network Service Operator or Telecom Service Providers and they would not be allowed to install equipment interconnecting with network of other NSOs," the guidelines said.

There will be no restriction in number of VNOs that can operate in an area and also no restriction on number of VNOs that can be linked to a telecom operator network.

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.

State-run telecom operator BSNL has already received interest from several players for setting up VNO like Datawind and Bluetown.

A VNO will be allowed to partner with multiple telecom operators but will not be able to provide services that require numbering and unique identity of customers for security reasons.

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 UL VNO condition bars telecom operators from holding any kind of beneficial stake in a VNO parented by its competitors in a service area. It also bars a VNO from holding any kind of beneficial interest in other VNO either directly or indirectly in same service area.