VNOs most opportune route to rescue the shaky Telecom in India

VNOs are now a reality in India. Aerovoyce is the country’s first MVNO that has started its operations from Tamil Nadu. One would wonder why would VNOs be an interesting development about India where we are already seeing consolidation taking place and the remaining bleeding money. So, how VNOs would not add to the worries?

Looking at the present scenario, VNOs could potentially be one of the best ways of ‘rescuing’ the present affairs of telecom India. Some of the main issues that the telecom sector is facing include:-

Transitioning from a voice centric to data oriented services.

Balancing the resources between continuity of existing services and building for the next generation of services.

Restructuring of the industry after M&As and emergence of a new ‘strong’ credentials player.

Reduced time to monetize return on investments moving along the evolutionary generations of mobile technologies.

Legacy infrastructure versus deployment of next generation infrastructure.

Meeting rising expectations of consumers – individual as well as enterprise.

Monetising innovative use cases arising out of IoT, Analytics, Cloud and other such technologies.

Under-utilisation of capacities in case of public sector telcos.

Reducing the digital divide and having a focus around improving the rural telephony.

Lack of skills within telcos to respond to changing opportunities.

These issues, though do not encompass all the major issues faced by the Indian telecom, but list out some of the common challenges that the operators are facing across. VNOs can pitch in exactly filling the gaps to get rid of several of these challenges. For this, let’s have a look at what VNOs could potentially bring to the service scape:-

Investments:VNOs, especially MVNOs have not necessarily originated from a communications background. Virgin Mobile is a classic example. Diversification is the rule of business and everyone cannot be as big as Reliance Industries to conglomerate diversify full blown in one go. VNO model gives a good opportunity to businesses that want to go for heterogeneous diversification having no technology or communications background. There can be coupling of a technology partner along with a business exploring diversification and they could jointly enter the communications space through VNO route. Another possible model could be the NSO launching a niche VNO with investments coming from a potential business looking for diversification. All these permutations and combinations will ultimately bring more money into the industry.

Capacity Utilisation:This is a problem specific to the public-sector operators. A potential VNO can ‘underwrite’ the utilization of unspent capacities that not only affect the CAPEX returns of an operator but also makes the operations unviable over a period. As these VNOs, will surface only after having a definite business plan, they will ensure that the capacities are utilized. This is also a way of ‘privatising’ the resources in a limited way of a public-sector operator without losing the ownership.

Use cases:The private operators essentially who have invested and aligned their resources towards evolving as a data oriented operator, are finding it challenging to evolve beyond offering a plain bit-pipe. This isn’t helping increase the perceived value of the offering in the eyes of users beyond offering more of speed and bandwidth leading the next generation upgrade to be perceived as just another vanilla upgrade.

Through VNOs the operators could explore a lot of use cases that could come from the experts in the area where these opportunities are. For instance, healthcare providers, retail giants, car makers, etc. can either partner with NSOs or come on their own to offer next generation of services enabled over a network in their business domains. Similarly, several innovative startups in ICT can facilitate operators build use cases that not only help transition towards data services but also puts operators ahead of curve by offering innovative services adding real value to the networks and increasing revenues.

This becomes very important with IoT and Cloud based opportunities around.

Targeted Markets:Due to diversity in the country on several fronts, the networks have not been same across the country. There are pockets where improvements are required. Rural is one of them if we look from geographic point of view. There could be a VNO business model built that focuses only on the rural market communications and this network could be potentially used for advertising and other G2C services in rural areas for sustainability. This could be topped with information services about agriculture and farming to add value for the potential users.

A similar target market could be culled out based on the demographics for college and university students. The network could be empowered with e-learning tools where the students would use the network for education purposes along with the basic communication needs. The National Knowledge Network (NKN) could also be roped in to further enrich the offering.
These are some of the major benefits VNOs could bring in to the telecom ecosystem in India. Of course, this might need a little tweaking on the regulatory framework, but with the present dispensation being more than enabling that should not be a hiccup.

The idea should be that VNOs further empower our thriving and proud telecom ecosystem and not become an ill and weak entity of the stressful telecom we have right now.