The recommendations, which Trai issued on 6 August, 2008, will allow companies to offer mobile services without owning a network or spectrum. The foreign as well as Indian companies can set up MVNO in India which can roll out wireless telecom services by renting spectrum and networks from existing telecom companies.

The government said that the detailed guidelines for MVNO will be issued by Department of Telecom (DoT) after it receives response from Trai on some issues.

Trai has recommended a foreign holding cap of 74 per cent in MVNOs, in line with other telecom services. Meanwhile, Mobile operators would be free to lease spectrum to as many MVNOs as they want.

With the introduction of MVNO, the telecom sector will witness the removal of a strong entry barrier which may enable the entry of asset-light companies which would reduce call rates further.