India Takes Closer Look at Virgin-Tata Deal

The country's Telecommunications Dept. examines the details of a deal under which Tata will provide Virgin-branded mobile services

India is studying the fineprint of an agreement between Richard Branson's Virgin Mobile and Tata Teleservices for mobile services to see if it complies with licensing norms of the country.

The Department of Telecommunications (DoT) has asked its licensing wing to look into the nuances of the deal under which Tata will provide Virgin-branded mobile services, under CDMA technology.

Rival operators have alleged this amounts to Virgin's entry as a mobile virtual network operator (MVNO) while the two partners deny the suggestion.

Aside from the DoT, the finance ministry may also look into the proposed partnership.

Sources said the telecom regulator Trai would only look into the issue if asked by the DoT.

"We have not seen the agreement between both companies, so we cannot comment. But we are very interested in studying the details of the JV. Both companies have already briefed the DoT on this issue before they announced the JV," a Trai source said.

Further, GSM operators may ask the DoT to get the JV details made public and demand that the DoT set up a committee with industry representation to look into the MVNO question.

An MVNO does not phone spectrum or infrastructure, but runs a service by leasing facilities.

Tata officials said that the company has not been approached by the authorities yet and would comply with the regulatory requests when approached.

Cellular Operators Association of India (COAI), the body representing all GSM players, has already written to the department of telecom to clarify whether MVNOs can be permitted to offer services in India following Virgin Mobile's entry in India.

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