Tough entry

New Delhi, March 20: The government has decided to re-examine the Tata-Virgin deal based on queries from the COAI. The COAI has sought clarifications on Richard Branson’s Virgin Group’s entry into the Indian mobile market.

Officials in the department of telecom (DoT) said the government had already sought clarifications from Tata Tele on three aspects of the deal: Would Tata Tele bill the customer in its name, would the revenues accrued be added to Tata Tele’s turnover, and would customers brought in under the Virgin brand be added to the total subscriber base of Tata Teleservices?

“We have received satisfactory clarifications from Tata Teleservices regarding all queries on the Tata-Virgin deal structure. However, we will pursue the matter further on the insistence of certain telecom lobby groups,” said DoT officials.

GSM lobby group, the Cellular Operators Association of India (COAI), today wrote to telecom secretary Siddhartha Behura asking for detailed guidelines on allowing mobile virtual network operators (MVNO) to operate in India, specifically with regard to the Tata-Virgin deal.

“The Tata-Virgin franchisee arrangement has to be studied in detail to understand whether this arrangement has been designed so as to allow Virgin Mobile India to offer mobile services in the country without owning a telecom licence,” said T.V. Ramachandran, director-general of the COAI.

He added that while the COAI was not opposed to the entry of mobile virtual network operators in India, it wanted comprehensive guidelines to be issued before these were permitted.

A mobile virtual network operator offers voice and data services without actually owning any radiowaves or network infrastructure such as telecom towers or transmission equipment. In the US and Canada, Virgin runs MVNO operations.

Earlier this month, Tata Teleservices entered into an exclusive franchisee deal with Virgin Mobile whereby it would sell Virgin branded mobile value-added services for its code division multiple access technology segment.

The move had met with protests from GSM operators who termed the alliance as an MVNO, which is not legally allowed in the country. However, Tata Teleservices maintained that the agreement with Virgin Mobile was in line with telecom licence conditions.