Indian 2G Wireless Space is getting too crowded with 8+ operators per circle. There is no proper policy and framework for spectrum in place. In our view, the Government should have restricted to 6 operators per circle and encourage other aspirants to take the MVNO route making the existing operators open up their networks for MVNOs without any lobby.
Today, we examine the Need and Benefits of MVNO in India.
- Due to the vast territory of each licence area, diverse customer demographics & various Value Added Services, it becomes difficult for an MNO to serve niche and far away customers. MVNOs may help the wireless operator widen their market & efficiently use its existing infrastructure.
- An MVNO can identify and serve niche segments such as children, students, the elderly or people with disabilities, travelers or business classes like stock markets
- An airline, retail/hotel chain, FMCG, sporting goods or Entertainment Company or a popular beverage brand can leverage its brand appeal with certain segments to cross-sell mobile services
- An MVNO with a strong retail chain may be able to address the issues of customer acquisition and customer care more effectively & can provide several niche value added services like booking and delivery of tickets (air, rail, cinema, etc)
- Specialized MVNOs with tie-ups with global content providers can accelerate 3G usage, facilitate faster 3G rollouts & hence ensure healthy return on investments for 3G Operators
- The margin pressures will force the new entrants & less successful telcos to accept the MVNO route to target specific segments of the market & improve utilization of resources.
