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India’s converging telecom and changing digital landscape is creating opportunities for entities like DTH operators, banks, as well as big media and content companies, to enter into Mobile Virtual Network Operators (MVNO) business, according to consulting firm Deloitte.
“In addition to the diversified and segmented nature of India market, we’re also witnessing converging telecom and changing digital landscape similar to some mature markets.
This means there is an opportunity for newer entities across key industry verticals, for example, DTH operators, Banking, Over-The-Top (OTT) players and big media and content companies to enter into the MVNO business,” Neeraj Jain, Partner, Deloitte India told PTI.
The Virtual Network Operators will be entities providing telecom services like mobile, landline and Internet, but only as retailer for full-fledged telecom operators such as BSNL, MTNL and Airtel.
The entry of such operators is expected to push down cost of providing telecom services for companies and even give them room for cutting down tariffs.
“Looking from the prepaid customer base, new MVNO’s Average Revenue Per User (ARPU) could be around ₹200 per month...this largely depends on the quality of service and the differentiation MVNOs offers. If MVNOs focus on pure play voice services and focus on price as differentiator then ARPU could be around ₹150 per month,” Jain said.
Based on firm Deloitte’s estimates, MVNOs could capture 60-80 million subscribers, with topline revenue between ₹1,000-1,300 crore per month over the next two-three year time frame.
Deloitte’s recent report titled ‘MVNO 2.0 — Opportunity for entities aspiring to be part of Indian telecom ecosystem’, has pointed out that the participation in the last three spectrum auctions has resulted in debt in the books of mobile network operators or MNOs. “With growing debt, managing the tightrope walk of Return-On-Investment has become a major challenge for MNOs. To overcome the challenge, MNOs should look at MVNOs as partners and choose to work with them by opening up some under-serviced customer segments, demography wise, and some underutilised networks capacities and assets, geography wise.
The report further said that opportunities for MVNO players in India include tapping demand for bespoke products in highly-penetrated markets, subscriber acquisition in rural markets and Tier 2/3 cities, which are upcoming hubs of business and academic activities.
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