Virgin's foray into India could run into a regulatory glitch. The DoT is looking into the structure of the JV. This comes after the COAI wrote seeking clarifications on Branson's entry. Tata Teleservices maintains that Virgin is a franchisee and not a mobile virtual network operator. 

A day after Virgin Mobile announced its foray into India with Tata Tele, the DoT has decided to examine the conformity of the deal with licencing regulations. Telecom Secretary S Behura has asked the licencing department to vet the deal in light of apprehensions raised by sections of the industry.

COAI had written to the DoT last week, seeking clarity on the partnership and whether policy has been tweaked to allow MVNOs to operate. Both Tata Tele and Virgin maintain that such apprehensions are completely uncalled for.  They say that Virgin Mobile will essentially be a sub-brand of Tata Tele and one that will be serviced by the Tatas.

But sections of the industry still maintain that the Tata-Virgin deal amounts to backdoor entry for the Virgin Group. The government does not want to take a chance, especially as more than 20 companies are waiting in the queue to enter the telecom market.

Sources in the DoT have however clarified that if the partnership is just a franchise arrangement, then it does not require prior government approval. We learn the licencing wing should be submitting the report by the end of this week and that should settle the matter hopefully once and for all.

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