India's expected permission for mobile virtual network operators (MVNOs) will remove a strong entry barrier in the telecom services segment and enable asset-light companies to set up shop in the world's fastest growing mobile market, experts, quoted in an Economic Times report, said.
It will boost handset sales and also help new service providers, which have recently got license, to utilise their capacity better and enter service circles for which they don't have license, the report said.
The Economic Times report also quoted Nokia India marketing director Devinder Kishore as saying 'it's more the merrier,'
India's Department of Telecommunications (DoT) plans to allow MVNOs, removing a legal bottleneck that led to a controversy involving the entry of Richard Branson's Virgin brand in a tie-up with Tata Teleservices, the report said.
All operators in India now operate on their own network.
A Mumbai-based analyst said MVNOs would spruce things up for the newcomers to the mobile telephony market in India. MVNOs, such as Virgin Mobile and BT in the UK, would help them gain valuable market experience. Many new licensees believe MVNOs will add efficiency in their roll-out plans. While none of the new entrants would comment officially as they await spectrum, some of them expect that this model would bring in additional revenues and contribute towards the creation of sizeable capital value.
Also, some of the new entrants have been granted licenses only for a few circles and can now expand to the rest of India using this model.