NTP 2012: Indian telecom operator to benefit from resale of mobile services

Telecom Lead India: The National Telecom Policy 2012 has
paved the way for resale of mobile services.

This will be a landmark decision by the Telecommunication
Minister Kapil Sabil since the previous NTPs – in 1994, 1999 and 2004 – did not
consider resale.

NTP 2012 will facilitate resale at service level –
both wholesale and retail – especially keeping in mind the need for robust
competition at the consumer end while ensuring due compliance with security and
other license related obligations.

This will be a strategic move for operators who are
facing pressure to improve profitability from voice services.

The new policy allows telecom operators such as Reliance
Communications to appoint resellers who will buy bulk minutes from Reliance at
a wholesale price and resell them under their own or a joint brand to the

The policy will also assist the telecom ministry to
achieve rural teledensity targets. The government is looking at increasing
rural teledensity from 39 to 70 by the year 2017 and 100 by the year 2020.

The reseller will not need to invest in infrastructure as
is the case with the MVNO (mobile virtual network operators) model. Currently
this is prohibited.

Times of India in 2011 reported that resale raises
competition issues including the abuse of market power as well as
anti-competitive practices by those operators, who are vertically integrated
across multiple services, own networks, and provide service.

The policy will help in launching multi-branded services.
For instance, an operator like Airtel can have a woman-oriented product under a
new brand which can be sold and managed by Future Group’s Big Baazar.

The policy allows telecom operators to gain from resale of
services. This will help in expanding the reach of their services. Will
operators take up this as an additional revenue stream?

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