I happened to watch this interview of Mr. Sunil Mittal [Founder and Chariman of Bharti Airtel] on CNBC this evening where he said MVNOs don’t make sens in the current context of Indian Wireless market. DoT has given the Green Signal for MVNOs to be operational in India.
I can’t reproduce his exact wordings but I can certainly recall he said that MVNOs are arbitrage seekers. The whole idea of MVNos in India would have made sense when the call rates were Rs 4 or higher and not when they ar at Rs 0.50-0.60. Western Countries still have high cost of network and MVNOs make sense to run a reasonable business. He further added that Virgin Mobile barely makes big money out of its MVNO operations.
Only when Mittal showed the way how to make money in telecom everybody wanted a slice of this market and the rush for the Gld began that is when folks at DoT woke up to the concept of MVNO. Similarly when Long Distance rates have hit Rs 1 or Rs 0.50 in case of BSNL, DoT gave the go ahead for Calling Cards. However, in this case of calling cards I can smell foul play by existing telcos to toss the file into some abandoned place so that they can continue to make money.
Update: oops! this should have been published last night, somehow it got stuck.