- Government policies: Government initiatives like BharatNet, Digital India, Make in India and Smart Cities, Mobile Broadband, Digital payments push, including mobile payments are opportunities which MVNOs can leverage to offer services in underserved areas, including rural, SMEs/MSMEs and captive customers of distribution based companies, Fintech companies, etc.
- Market consolidation: With Airtel acquiring Telenor and M&A between of Idea with Vodafone, Reliance Communications-Aircel & BSNL-MTNL, and we will see India’s telecom market is consolidating to a 4-5 strong player market. With a government-owned player and four privately owned providers. Due to consolidation, market will stabilize and MVNOs can pitch in with their innovative offerings. MVNOs will aim for niche markets geographically and/or demographically.
- MNOs offloading a part of their offerings: As MNOs find it hard to provide all the telecom services at best of prices; this offers immense opportunities for MVNOs. MNOs will offload some of their services to MVNOs which helps them to manage their network better and reduce debts. MVNOs may provide regular income to MNOs and thus help keep up profitability.
- Excess capacity utilization: All major MNO’s have surplus capacity; this excess capacity could be subcontracted to MVNOs for efficient use of idle resources.
- Well penetrated urban markets: With 150% tele-density, urban markets like Delhi, Mumbai, Bangalore and other big cities are mature and open for better value added services.
- Evolving telecom services market in India: Tele-density in India stands at 93% compared to mature markets like Singapore where it stands at 150%. Broadband subscribers’ base in India stands at 20% and Internet penetration at 31%. Internet penetration in India is lower compared to other markets of SE Asia like Indonesia (50.4%), Malaysia (67.7%), Philippines (52.0%), Singapore (81.2%), Thailand (60.0%), etc., which opens up the opportunity for MVNOs to serve the underserved section of Indian market.
- The quality of service by MNOs: One of the challenges for Indian telecom operators is QoS. Call drops, uneven data throughput and network disruptions are common. MVNOs can capitalize on this by offering better QoS and superior user experience at competitive rates.
With 1.2Bn telecom subscriptions India’s telecom market is 2nd largest in the world after China. It can, perhaps, be characterized as large and over competitive market due to high density of service providers leading to one of the lowest call rates, consequently, declining revenues, higher operating and high regulatory costs above all this. Moreover, the Department of Telecommunication (DOT) has approved MVNO entry in India now. As per the latest reports more than 60 companies have already applied for an MVNO license. What does it foretell? Though Indian market is competitive and fragmented, by many indicators, it still offers a lot of opportunities for MVNOs to sustain and even flourish.