India clears Tata Tele, Virgin tie-up - report

MUMBAI, March 29 (Reuters) - India has given the green light to the tie-up between telecoms operator Tata Teleservices and UK's Virgin Mobile, after it was convinced the combination was legal, the Economic Times newspaper said on Saturday.

The Department of Telecommunications (DoT) had sought clarification from Tata Teleservices after a lobby group of telecom operators had demanded the government inquire into the legality of the tie-up.

DoT had decided the tie-up was not operating as a mobile virtual network operator (MVNO), based on Tata Teleservices' argument that it had no partnership for use of network or spectrum with Virgin and the tie-up was purely for non-license activities, the report said.

Earlier this month, Virgin Mobile, a unit of British communications group Virgin Media (VMED.O: Quote, Profile, Research), launched a youth-focused service in India through Tata Teleservices.

This had lobby group, Cellular Operators Association of India, demanding the government check if the tie-up meant Virgin was entering India as a mobile virtual network operator (MVNO).

MVNOs, which do not own networks or spectrum but rent it out from other operators, are not permitted in India.

Tata Teleservices and its subsidiary, Tata Teleservices (Maharashtra) Ltd (TTML.BO: Quote, Profile, Research), operate in 20 of India's 23 telecom zones.

Richard Branson's Virgin Group operates flights to London from India and has a minority stake in private FM radio operator, Fever, controlled by HT Media (HTML.BO: Quote, Profile, Research).

Virgin Comics is partnering India's Studio 18 and broadcaster UTV Software Communications Ltd (UTVS.BO: Quote, Profile, Research) for publishing, television, film and gaming. (Reporting by Bharghavi Nagaraju)