The DoT has permitted Mobile Virtual Network Operators to operate in India. We would like to analyze the impact of MVNOs operations on MNOs [Mobile Network Operator].
CDMA operator Reliance Communications and Tata Teleservices who plan to have pan-India dual technology network will be benefited due to lower operating costs and better network utilizations. Established players like Bharti Airtel & Vodafone may be benefited due economies of scale & effective product bundling and cross selling.
New entrants would be able to garner market share faster by partnering MVNOs with established brand & distribution networks. As the net realizations of MVNOs are expected to be lower than MVNOs, they are not expected to compete significantly on the price front.
The entry of MVNOs could coincide with MNP implementation resulting in increased customer churn, customer acquisition & servicing costs & hence reduced profitability for the industry as a whole. Finally, Foreign players who succeed in getting 3G spectrum in some circles will be able to provide pan-India services by being an MVNO in other circles.
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