Virgin Mobile

We all know that Virgin Mobile launched their operations in mobile phone connectivity sometime in early 2008(around March, may be). And the brand has been creating a bang in its ad promos ever since. I was quite curious to find out more about Virgin's modus operandi, wooed by the charisma of the parent brand Virgin Mobile.

A few months ago, I discovered, much to my surprise, that Virgin Mobile's Indian JV partner was actually Tata Teleservices. Having discovered this piece of info, I conveniently took it for granted that Virgin was offering GSM services. And I was continuing to be under this impression until yesterday.

Turns out that Virgin Mobile India is actually offering CDMA services here. Then it struck me. Why in the best of their minds would Tatas have a JV with a company that is actually offering the same CDMA services??? and why would Virgin also agree to such a deal? is entering the indian market so lucrative for them that they dont mind partnering with a potential rival company?

Enter MVNO

Apparently it works this way. Virgin Mobile India has registered itself as an MVNO, which stands for Mobile Virtual Network Operator. An MVNO is different from the regular Mobile Operators in the sense that he does not own any physical infrastructure for his network service. He uses the infrastructure of another company, and sells his product. So basically, Virgin takes the Tata's licensed frequency on a lease and uses it to sell its SIM cards. Like people live in rented houses, Virgin pays Tatas for the frequencies and the physical infrastructure, their maintenance et al., and on its own focusses only on marketing its product.

When I read this, my first impulse was to compare Virgin Mobile India to a cuckoo bird, which gets to raise its children and yet doesnt have to be hassled with the actual parenting process. But then on second thoughts, I felt why not? I mean I'm sure Tatas are getting paid well for the services they are offering so why not? This is just another way to keep the cash registers ringing right. And then things fell into place in my head, and I realised how these two potentially rival companies could even think of operating in the same market.

As for the legality of such an agreement, I was able to lay my hands on a PDF of an old version of the license agreement that Cellular operators sign with the Department of Telecommunications. That file claims that a service provider signing up for the license is allowed to share the following :

a) “passive” infrastructure viz., building, tower, dark fiber etc.

b) point to point bandwidth from their own infrastructure within their Service Area to other licensed telecom service providers (no resale though)

Well, one thing is for sure. The rival GSM guys would have surely spent sleepless nights trying to come up with arguements to prove Virgin's cuckoo bird JV deal illegal. But here we are today, seeing Virgin becoming a fairly successful venture with a clever marketing , ad effort.

P.S.: Virgin Mobile is a successful telecom brand in the UK, and they operate as MVNOs there as well.

3G

I'm an avid tech enthusiast, and I try to keep a track of the arrival of a number of technology solutions in India. In that respect, I have been eagerly awaiting the launch of the 3G services of the mobile telephony in India for a long time now. But with current political and economic tensions, and the absence of Dayanidhi Maran in the Ministry, I have little hopes that 3G will materialise anytime soon.


The attraction to 3G is because of these:
1. 3G is bigger, better and faster than 2G

2. 3G operates in a wider range of frequency spectrum.
So it will help ease the spectrum crunch faced by operators particularly in the metros. This way they will be able to sustain the aggressive growth that has taken place.

3. 3G has four to five times higher voice capacity, which means we can get far more cost effective voice services.
That could translate to cheaper call rates!! yippee!!

4. 3G will open up a whole new range of services and applications that can be handled through the mobile device. This in
turn will increase the span of the telecom industry, with new businesses that will feed these services.


The Indian mobile telephone industry is fast maturing, and will evolve into a lucrative 3G market. We need to get our act together and quickly usher in the new technology, before another new technology renders this one obsolete.

The important reason behind the 3G launch reaching a stalemate is the spectrum crunch in the domestic segment. So the government is trying to increase this range by turning to other users of the frequency spectrum: the defence forces and space research. The thrust is on the defence forces to vacate a part of their spectrum.

For 3G to become a success and to achieve extremely high rates of penetration, it will require the government to prioritise technological infrastructure development. And licensing fees will have to be reduced. Secondly, the allotment of the frequencies to the service providers will have to be handled properly, so that they pass on the benefit to the end customer. 3G services must be positioned, priced and marketed in such a way that they cater to the needs of the so called tier 2 cities and lower down. People from these areas are going to propel the country's growth in the days to come.

What do you think?