India is the world’s second-largest telecommunications market. The total subscriber base stood at 1189.15 million in September 2021. Tele-density of rural subscribers reached 59.33% in September 2021, from the 58.96% recorded in September 2020. This increase indicates a potential demand growth from the rural sector. The total wireless or mobile telephone subscriber base reached 1166.02 million in September 2021, from 1,148.58 million in September 2020. The total number of internet subscribers reached 794.88 million in September 2021. Of this subscriber base, the number of wired internet subscribers was 24.29 million and wireless internet subscribers was 787.94 million.

The Indian mobile economy is growing rapidly and will contribute substantially to India’s Gross Domestic Product (GDP) according to a report prepared by GSM Association (GSMA) in collaboration with Boston Consulting Group (BCG). In 2019, India surpassed the US to become the second largest market in terms of number of app downloads.

Role of MVNOs in the Indian context

The role of Mobile Virtual Network Operators (MVNO) in the Indian context is relatively new, and the movement is relatively slow.  India’s Telecom regulator TRAI has a long-pending discussion over allowing MVNOs to operate in India. As of this writing, the regulator has permitted MVNOs to operate, and only the state-owned incumbent BSNL is permitted to perform, with its Aerovoyce in partnership with Adpay.

Presently, India’s population stands close to 1.4 billion and very close to China, with over 1 billion mobile subscribers, ARPU slightly over INR 100, and the lowest calling rate globally, with over 700 million broadband subscribers.  Declining revenues and high operating costs (OPEX) have primarily been pain points for operators, and with the coming of MVNOs, these mobile network operators can make more money.  As for now, state-owned BSNL has launched its MVNO called Aerovoyce in partnership with AdPay.

A Case for MVNOs

BharatNet, Digital India, Make in India, Smart Cities, Mobile Broadband, Digital payments push, including mobile payments are some of the opportunities which MVNOs can leverage to offer services in the underserved areas, including in rural areas, and can aim to provide small-medium business enterprises (SMEs/MSMEs). Captive customers of distribution-based companies and Fintech companies as a good target for MVNOs to start with.

India’s telecom landscape is a more mature market and primarily filled with the incumbent BSNL and private players like Bharti Airtel, Vodafone, and Reliance Communications will lend more stability and encourage MVNOs to participate and help them to innovate offerings and can widen their footprint across geographies.  

Most of the Mobile Network Operators (MNO) find it challenging to offer all services at the best prices, and they can now offload some of the benefits to MVNOs; this way, MNOs earn more income than MVNOs can make as well. Most of the large MNOs have excess network capacity, and such underutilized capacity can be subcontracted to MVNOs for efficient use of such extra network resources. A well penetrated mobile urban market and a potential broadband market will enable MVNOs to offer services.  End subscribers face call drops and network disruption, resulting in low Quality of Service (QoS); MVNOs can take up such services, ensuring better QoS to end subscribers.

End Note

MVNOs in India, the field is large they need to be ably supported by telecom regulations, mobile network operators support to achieve success.  MVNO’s can look forward to STL, a leader in digital network aggregation. STL’s MVNO solutions will help immensely, backed with a utility pay-per-use model that enables cost optimization and earns more revenues. STL has also developed MVNE solution (earlier under the name of Elitecore) for CAT Telecom on which 4 MVNOs have already on-boarded. Access network and vendor agnostic solutions of Sterlite Tech make it ideal for Telcos to integrate their systems seamlessly. Indigenously developed BSS OSS solutions by Sterlite Tech are ready to meet MVNO resurgence across India. Reach out to the technical team to understand more about it.