Denied MVNO status, Virgin to sell handsets?

28 Feb

Starting a new business in India, especially in the telecom industry is never easy. Well, everyone knows what it took Vodafone to acquire Hutchison Whampoa’s stake in Hutch Essar and the latest victim is Sir Richard Branson’s Virgin group. Here’s the story – Virgin had apparently tied up with Tata Indicom. According to the arrangement, Virgin would buy airtime from Tata and then resell it under their brand. In other words, Virgin would act as a Mobile Virtual Network Operator (MVNO).

So where’s the problem, you ask? Well, there are no set guidelines or provisions for an MVNO operation in India and the press got a whiff of the deal, which it dutifully reported. As with any ‘mega deal’, the Cellular Operators Association of India – the lobbying body of GSM operators – then promptly shot a letter to the Department of Telecom’s Secretary, asking if and when the telecom policy was amended to allow MVNO and if licenses were granted and to whom. Cellpassion is in possession of the copy of the letter.

Apparently Virgin has now dropped the idea to launch its MVNO business and is planning to launch handsets for Tata Indicom. Virgin is speculated to hold a press briefing on March 2 in Mumbai, where it is expected to launch five handsets ranging from Rs 2,500 ($62.5) to Rs 5,000 ($125) in price. Jesus! Now where else can you see an MVNO hopeful ending up selling cellphones?

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