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HomeArticlesDistrict Level VNOs Get the nod from TRAI
Tuesday, 17 October 2017 05:59

District Level VNOs Get the nod from TRAI

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The National Telecom Policy, NTP-2012, had suggested the licensing of Virtual Network Operators (VNO) delinking licenses for networks from the delivery of services.  TRAI was asked to give its recommendations on the issue including associated issues of definition of Adjusted Gross Revenue (AGR) under the UL regime’. The Authority had given its recommendations on “Introducing Virtual Network Operators in telecom sector” on 1st May, 2015. 

Pursuant to these recommendations DoT issued guidelines and license agreement for the grant of Unified License on 31st May, 2016. Under Unified License (UL) policy, VNOs are created to exploit the benefits of convergence, spectrum liberalization and facilitate delinking of the licensing of networks from the delivery of services so as to enable the Telecom Service Providers (TSPs) to optimally and efficiently utilize their networks and spectrum by sharing active and passive infrastructure. 

On request of DoT, the Authority has subsequently given its recommendations based on inputs received from the stakeholders, views expressed during the OHD and its own internal analysis. Cat ‘B’ VNO license holds great opportunity for medium and small MSOs who would advance to broadband and telecom services along with cable television. Summary of recommendations is given below. 

  • A new category of authorization may be introduced under Unified License (VNO), for Access Service as Category ‘B’ license with districts as a Service Area on non-exclusive basis.

  • To continue their services, existing DID franchisees should migrate to UL (VNO) Category ‘B’.

  • New license should not be restricted only to existing DID franchisees and should also be open to new entities intending to offer such services.

  • Scope of proposed UL (VNO) Cat ‘B’ license should be to provide only wireline access services within a district. Wireless access services shall not be a part of the scope of UL VNO Cat ‘B’.

  • The number of district to be served by a UL (VNO) Cat ‘B’ licensee in a telecom circle should be limited to four. 

  • The duration of UL (VNO) Cat ‘B’ license shall remain consistent with the guidelines of UL (VNO). Accordingly, licenses will be issued for 10 years duration and further renewable for 10 years as per prevailing terms and conditions.

  • Entry Fee of ` 1,65,000 for 10 years of duration of license shall be applicable to the UL (VNO) Cat ‘B’ licensee. 

  • FBG of ` 1,00,000 shall be applicable to UL (VNO) Cat ‘B’ 46 licensee. 

  • UL (VNO) Cat ‘B’ licensee shall posses a minimum networth of more than ` 5 lakhs per authorization. 

  • In order to promote fixed line Broadband, the DoT should implement TRAI 

  • recommendations dated 17th April, 2015 on ‘Delivering Broadband Quickly: What do we need to do?’, wherein the license fee on the revenue earned from fixed line BB should be exempted for at least 5 years. 
  • To avoid double taxation DoT may consider review of AGR components; and charges paid by UL (VNO) licensee to the TSP/NSO for procurement of services should be allowed to be deducted as pass through charges for the purpose of calculating the AGR, similar to other pass through charges permitted under UL like IUC, roaming charges etc. This will be in line with the Input Tax Credit (ITC) feature under Goods and Service Tax regime. 

  • Relevant QoS parameters as applicable to UL (VNO) shall also be applicable to UL (VNO) Cat ‘B’ licensee. 

  • In order to meet the requirement of connectivity UL (VNO) Cat ‘B’ licensees may be allowed to have arrangement for connectivity at different locations with different TSPs/NSOs in its licensed area of operation i.e. within the geography of a district, only in case of provision of wireline access services through EPABX. 

  • UL (VNO) (Access service) license may be amended to enable the provision of allowing parenting with multiple NSOs by a VNO for wireline network at different locations of the LSA only in case of provision of wireline access services through EPABX .

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