VNOs in India

Speed in issuing VNO licenses is required: Amitabh Singhal, VNO Forum

By Nandita Singh

Amitabh Singhal, President of Virtual Network Operators Forum (VNO Forum) in conversation with Voice&Data throws light on specific issues that the fledgling VNO industry in India needs to counter and the need for speed in issuing VNO licenses.

Voice&Data: Can you elaborate on the VNO Forum and its agenda?

Amitabh Singhal: VNO Forum is a community and stakeholders driven think tank with a formal structure including a Board of Governors headed by a Chairperson.

Since the time VNOF was floated as an idea in mid-2016, it has done plenty of work, which includes moderating a Roundtable Conference in September 2016, attended by nearly 150 delegates. It was the first ever VNO specific conference in India. Post conference, VNOF published a set of “Policy & Regulatory Recommendations” relating to issues which ought to be looked into, if the orderly growth of VNOs has to be ensured.

We have initiated our interventions in TRAI’s Consultation process. We have responded to the Paper on Issues related to Closure of Access Services comprehensively on behalf of VNOs. We are looking at other Consultation Papers, which TRAI has released recently, specifically to address the issue of VNO B category Access Licenses issued to the DID operators (this could be a burgeoning issue since such a license was not part of the original recommendations of TRAI and many aspects have to be carefully assessed and looked into).

We will have to involve these specific players and seek their response, assess and articulate them in front of the Regulator appropriately.

Additionally, we have already begun the process of promoting VNOF and the opportunity for VNOs in India in international forums, having participated in international webinars.

VNOF is open for membership to all who have a stake in the business of Virtual Network Operations, be it a VNO, or a VNE (Virtual Network Enabler) or a Telco or any other licensed operator or any other solution providers from the Industry. Inducting members is an ongoing process, as the grant of licenses have just started by the government.

There are various, but simplified types of memberships and anyone interested can request the VNOF secretariat and seek a copy of application form and other information on how and what it takes to be a member.

Voice&Data: And when is the next VNOF meeting? How can one participate?

Amitabh Singhal: The next major event planned is a VNO Conference on April 20, 2017 in New Delhi. Anyone interested in participating as a sponsor, speaker or delegate may contact our senior representatives for the purpose by logging onto the site www.vnoforum.com.

Opportunity is also available to anyone from India market to participate in international VNO conferences, one of which is slated for April 2017 in Nice, France and later on in Singapore.

Voice&Data: What would you say are the major issues that VNOs in India have to face before they can get going?

Amitabh Singhal: I think, there are several regulatory issues that need to be dealt with and some of these are:

  • a) Levy of Revenue share of 8%-10%. This really amounts to a double levy. Telcos are the infrastructure providers who already pay revenue share. Its unique that VNOs as users of the same network as resellers of the same Telcos will also pay a similar revenue share. There is no economic logic to it, except that by virtue of being a Licensee, a revenue share is imposed as a mandatory obligation.
  • b) Spectrum Usage charge on VNOs. This is strange considering that VNOs will only use the spectrum of their respective parent telco/s who have acquired, paid for and are paying their spectrum charges already. Parent Telcos, when they earn additional revenues from VNOs will in any case pay a higher revenue share to the government as their License Fee. At best, VNO revenue share and spectrum charge should go or at worst, be allowed for pass through adjustment.
  • c) Single NSO parent for Access Services. This severely limits the VNO’s ability to change their NSO’s and keeps them tied perforce to it, even if there are issues of quality and reliability with the NSO’s network. This condition limits the competitive advantage which VNOs need and hence should be revoked.
  • d) The above coupled with the Rs 7.5 crore License fee would definitely make it hard for VNOs to attain financial viability and could prove to be detrimental factors in the growth expectations of the VNO industry.
  • e) Currently, there is no IUC framework for VNOs and Telcos. Not that I am suggesting there should be one, perhaps it is not needed right now, but will have to have a regulatory oversight over issues like predatory pricing by the NSOs to the disadvantage of their own VNOs. TRAI will do well to ensure that a Retail Minus Principle is applied or practiced diligently.
  • f) FDI under the Automatic Route. There are hundreds of successful VNOs across the globe who would have been looking expectantly at entering the Indian market. However, since only 49% is allowed under the automatic FDI approval route, it may be deterring many of them from venturing into Indian market. As part of ease of doing business, I think that automatic route FDI approval should be up to 100%.

Voice&Data: What is the current status of licensing of VNOs in terms of numbers, types, etc.?

Amitabh Singhal: We believe that anywhere between 20-25 licenses have been issued lately. Majority of these are VNO B Category Access Service licenses, given out to DID players (who were franchise of Telcos) at a very nominal cost. There are some players from the digital advertising and mobile payment businesses who have received some licenses of different categories.

Concern here is the time taken to issue the licenses from the time the guidelines were announced last June 2016 and potential players applied for their licenses. I think, the government needs to speed up the process, as this delay is negatively impacting the perception of ease of doing business again.

 

 

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