Initial licence should be for 10 years as VNO is new concept: TRAI

NEW DELHI: Virtual Network Operators (VNO) in the telecom sector should be permitted for all segments of voice, data and video as well as for all services notified in the unified license (UL) for a period of ten years, extendable by ten years at a time. 


The Telecom Regulatory Authority of India (TRAI) in its recommendations has said VNO should be introduced through proper "licensing framework" in the Indian telecom sector.


For introduction of VNO in the sector, there should be a separate category of license namely UL (VNO). Like UL authorization, only pan-India or service area-wise authorizations may be granted under a UL (VNO) license.


The recommendations were given after the Department of Telecommunications (DoT) through its reference of 7 July last year had sought recommendations of TRAI on the subject.


TRAI said that VNOs are service delivery operators, who do not own the underlying core network but rely on the network and support of the infrastructure providers for providing telecom services to end users and customers. 


VNOs can provide any or all telecom services, which are being provided by the existing telecom service providers.


VNO should be introduced in the network based on the basis of mutually accepted  terms and conditions between NSO and the VNO. The terms and conditions of sharing the infrastructure between the NSO and VNO are left to the market to determine.


VNOs should be permitted to set up their own   network equipment where there is no requirement of interconnection with other NSO.  However, they should not be allowed to own/install equipment where interconnection is required with another NSO.


Local Cable Operators (LCOs) and Multi Service Operators (MSOs) can become VNO and are permitted to share infrastructure with VNOs.


There should not be a restriction on the number of VNO licensees per service area and there should be no restriction on the number of VNOs parented by an NSO.


Customer verification and number activation shall be the responsibility of a VNO for its own customers.


VNOs that enter the network would do so based on arriving at a mutual agreement between an NSO and a VNO.


The Authority recommended that VNOs should be permitted for all services notified in the UL.                                            


TRAI recommended that the terms and conditions of sharing of infrastructure between the NSO and VNO should be left to the market i.e. on the basis of mutually accepted terms and conditions between the NSO and the VNO.       


The Authority recommended VNOs be permitted to set up their own network equipment viz. BTS, BSC, MSC, RSU, DSLAMs, LAN switches, where there is no requirement of interconnection with other NSO(s). Therefore, they should not be allowed to own/install equipment viz. GMSCs, Soft-switches and TAX.


Equipment permitted to be owned/installed by VNOs should conform to the technical standards prescribed by standardization bodies like TEC and ITU.


VNOs may also be allowed to create their own service delivery platforms in respect of customer service, billing and VAS. MSOs and LCOs who want to provide broadband services through their cable network may do so by obtaining a VNO license. MSOs/LCOs may also share their cable infrastructure with VNOs, after the MSO/LCO register themselves as an IP-I service provider.


There should be a separate category of license namely UL (VNO). This UL (VNO) will contain similar authorizations for services and service areas as provided in the existing UL.


An operator who wishes to provide telecom services to its customers utilizing the underlying network and/or access spectrum of an existing NSO will have to obtain UL (VNO) license. 


The Authority recommended that resale of IPLC presently under the UL shall be shifted from the existing UL to UL (VNO) licensing in order to make a clear distinction among the class of operators.


A VNO should be a company registered under the Indian Companies Act 1956 (as amended). The entry fee for UL (VNO) with a given authorisation will be 50 per cent of the entry fee prescribed for the UL. Financial Bank Guarantee will be equal to the amount of two quarter license fee. Minimum equity and minimum networth may be kept at 40 per cent of the amount prescribed under UL. 


The Authority recommended that under UL(VNO) the provision for restriction of 10 per cent or more equity cross holding to be applicable between (i) a VNO and another NSO (other than VNO’s parent NSO) and (ii) between a VNO and another VNO authorized to provide access services using the access  spectrum of different NSO in the same service area.                                                                         

A VNO shall be liable to pay LF as a percentage of AGR at the same rate as that of the parent NSO.


VNO shall also be liable to pay the SUC for the wireless service(s) it offers to the customers. The SUC rate will be same as that of the parent NSO.


Since Quality of Service is in the exclusive domain of TRAI, the Authority will put in place comprehensive regulations on QoS parameters to be complied separately by NSOs and VNOs.

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