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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Virtual Network Operator: its opportunities and challenges.
Apr 06, 2016 Related to : GS Paper-3

Ans :

Introduction-

Virtual Network Operator (VNO) is an entity that does not own a telecom network infrastructure but provides telecom (fixed line or mobile) services by purchasing from other telecom operators. These entities are categorized as virtual because they provide network services to customers without owning the underlying network.  Virgin Mobile, Tracfone and TalkMob are some of the top VNOs in the world.

In news- 


Recently telecom commission of India has accepted the TRAI’s recommendations to allow new category of unified license for virtual network operators. Now, it will be possible for a company without owning telecom network to offer fixed line or mobile services. After spectrum sharing and trading, this was another step towards liberalisation.

Opportunities-

  • Virtual network operators are usually tech- and marketing-savvy companies which operate in niche segments of the market. As they operate under asset light model, their tariffs are often low. Hence allowing VNO’s will give more choices to subscribers, and it is a market-friendly decision in a liberalised era.

  • VNO will be able to integrate service and offer it to customer as it wants. There will be no limit on integration and offering of services under new rules. If VNO’s partnered with multiple service providers, then it can offer voice call service of one and data service of other player.

  • It will benefit those telecom companies which have idle networks. It can sell its bandwidth to a virtual network operator. So it broadens the market for airwaves. Operators like MTNL, BSNL, which are mired in losses, could gain from the move because it gives them another avenue to monetise their idle bandwidth.

  • With advent of 4G, VNO’s can offer largely unutilised 3G spectrum to consumers.

Challenges-

  • As Indian market is already overcrowded with seven to eight players in each circle and mobile phone density in urban markets has crossed 100 per cent. Hence they may face difficulties.

  • Most of the small companies are in the stages of consolidation with big players. And big players (Airtel, Vodafone, Idea) themselves do not have spare bandwidths to offer to VNOs.

  • Though rural markets offer an opportunity for VNO’s, but those are typically low-paying subscribers. Also, the cost of reaching services to villages is high.

  • Many in market observers feel that India is a tough market because of low tariffs and expensive spectrum rates in comparison to other countries.

Conclusion-

Though challenges do exist, but allowing VNO’s will definitely enhance the telecommunication services with variety of choices in low cost to consumers. VNO’s can also help operators to utilise their infrastructure more efficiently, thereby expanding market share, addressing underserved market groups, and reducing subscriber acquisition costs. Overall it is a welcome move which help both operators and customers.


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