DoT clears Tata-Virgin deal

Putting to rest all controversy over the Tata Teleservices-Virgin alliance, the department of telecom (DoT) on Friday gave it a clean chit after receiving answers to its queries on whether the tie-up was above board. The DoT said Virgin Mobile India, the company formed under the tie-up, was not operating as a Mobile Virtual Network Operator (MVNO) in India.

While DoT had earlier said it had no problems with the tie-up, the GSM operators’ association, Cellular Operators’ Association of India (COAI), had written to the department alleging that Virgin was operating as an MVNO.

In its latest communication to DoT on March 20, COAI again claimed that Virgin Mobile was offering full-range mobile services like a licence holder in violation of existing regulations and the services were similar to those offered by Virgin as an MVNO in other countries like the UK and Australia. The DoT had then sought clarification from Tata Teleservices (TTL) on certain points, including usage of the Indian operator’s network or spectrum by Virgin.

The DoT based its final decision on Tata Teleservices’ arguments that it had no partnership for use of network or spectrum with Virgin and Virgin Mobile India was set up purely for non-licence activities.

“The Virgin Mobile brand Tariff Plan completely belongs to Tata Teleservices/TTML and it is subject to the regulatory process and has been filed by Tata Teleservices/TTML with Trai. All customers, tariff plan and the revenue belong to Tata Teleservices/TTML,” the DoT said in its statement. TTML stands for Tata Teleservices (Maharashtra).

In response to the DoT letter seeking details of the tie-up with Virgin, the CDMA operator said that it has obtained a trademark licence from UK-based Virgin Group to use the Virgin Mobile brand for marketing mobile services for youth. “Virgin is not launching any telecom services in India and thus it goes without saying that it’s not using network or spectrum of TTL,” the operator said in its response to DoT.

On the question of whether Virgin’s model was akin to MVNO, Tata Teleservices maintained its stand that its tie-up with Virgin did not follow that model. Pointing out that MVNO’s definition worldwide included two things — buying of bulk air time under contract from an operator & reselling of minutes as well as customer ownership, Tata Teleservices said, “None of these are applicable or relevant to TTL’s launch of Virgin Mobile branded services.”

MVNOs buy bulk airtime from mobile operators and sell packaged plans under their own brands. Virgin operates in most other countries as an MVNO. Indian regulations do not allow MVNOs to operate in the country.

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