New Mobile Operators are Coming to Pakistan – Virtually (MVNO)

PTA came up with brand new idea for allowing other operators to work in 803,940 km2 i.e. Pakistan. They are going to issue licenses to virtual mobile network operator. Virtual!!

According to definition from PTA, a Mobile Virtual Network Operator (MVNO) is an operator that does not own any spectrum; instead, MVNOs have commercial arrangements with conventional Mobile Network Operators (MNOs) for provision of mobile communication services to their own customers.

The requirements for being a MVNO are:

  • An MNO shall be allowed to make commercial agreements with multiple MVNOs. Similarly an MVNO shall also be allowed to operate/ make commercial agreements with more than one MNO.
  • The MNO that makes commercial agreement with a company for MVNO operation in Pakistan shall submit the same to the  authority for approval prior to giving effect to this agreement. After approval of the agreement, the company (interested in becoming an MVNO) shall apply to the Authority for MVNO class license.\
  • MVNOs shall not be allowed to install their own network elements (i.e. Radio Access, Transmission, Switching and Network equipments). Further, the agreement once approved by the Authority shall not be changed by any party without prior approval of the Authority.
  • Quality of Service shall be the sole responsibility of MVNO. Since MVNO shall hold its own brand name and costumer ownership, market its own SIMs, it must ensure that its users receive good quality of service as per benchmarks set by the Authority.
  • MVNO shall also be allowed to enter into roaming agreements with other operators on mutually agreed terms.
  • MVNO shall pay regulatory fees and contributions in the same way as applicable on MNOs. Initial License fee for an MVNO will be US $ 5 million or equivalent in Pak Rs.
  • The MVNO license shall be issued for an initial period of 10 years.

For those who are not familiar with MVNO, let me define this phenomena for you. A mobile virtual network operator (MVNO) is a cellular company (it can be a landline or WLL company too) that provides mobile/landline phone services but does not have its own network. They buy traffic (huge minutes) on wholesale rate from cellular companies and then resale them with their own brand name and prices to end users. MVNO companies are not sufficiently required to install their physical network. However, they normally have their billing system along with customer support and other departments.

Here is this article we did in Past to examine few angles of MVNO.

As of now, we are not sure if there is anyone interested in having MVNO license in Pakistan, however, 3/4 years ago there were investors interested in MVNO, such as Mobile Zone group and few others.

Personally, I don’t find any good reason to subset the operator other than bringing some bucks to the Foreign Exchange Reserve in shape of license fee. Comments are welcome though. What Do You Think??

You can find more details in this PDF file, that is framework for MVNO and application form too (Also found on PTA’s website).

  • can you give me any example of mvno,s from any other countries?
    virgin mobile is mvno inn India?

  • There are areas and opportunities that remain untapped. Social groups, niche markets and special sectors remain in need of efficient and tailor made mobile voice and text applications that only and MVNO will care to follow and deliver.

    Leaving the entire 90m cellular population to the mercy of 5 cellco’s (5X20=) 100 marketing and product guys is a bad idea.

    Let the MVNO’s bell ring!

    • A donkey is a donkey no matter which end you look at. Watten trying to revive Warid with a bundled service is not going to convince anyone that they are capable of running a business. It shows that Warid is significantly understateing its subscriber base which allows it to have the capacity to offer a MVNO traffic.

  • If MVNO is going to buy minutes in bulk from an operator and resell, then the margin for the MVNO will be less than for an operator because an operator’s cost per minute will always be less than that of an MVNO. Does MVNO have a business case in Pakistan? ARY, etc. tried it and failed.

  • I agree with zubair…Warid is the best operating network in Pakistan and never had a problem while even if you are on roaming

  • useless …… no benefits to the consumer…… another way to zardari pocket bucks….. zardari schemes r only for himself not for PAKISTAN

  • Also pak. market for mobile sims opertors is saturated….. now v need new technology like 3g….. ETC…….. if a mobile operator is offering whole sale minutes to virtual operator …… i guess it would b more beneficial for the opertor to provie such rates directly to the consumer …… it would promote their tele-company more ………thats what i feel

  • One has to think if the sole purpose of PTA is to generate money for the country or regulate the industry. Maybe they should be merged into CBR? The price tag of $5 million will make most business cases non-viable.

    Since price is the only differentiating factor average Pakistani consumer understands; this will further aggravate the price war.

    And the more we squeeze the operators; the worst financial position they will get into and the enhancements will go out of the window.

    We need SERVICES and not price war. Maybe PTA should offer incentives to operators to launch 3G in metro cities. This will give customers better quality services and better business cases to Telcos for higher investment.

    We may be able to bring in a few MVNOs; but the net effect will be ZERO.

  • I think there’s some misunderstanding about buying minutes etc. The word minutes is just used for ease. MVNO will buy some traffic , for example it’ll be not allowed to cross the traffic of 500 calls +10000 msgs per second . So it’ll just buy traffic not minutes. Thanx

  • actually MVNO is a great.. regional opportunity.

    let me give you a small example.

    there are many rural areas in Pakistan where mobile markets have not yet saturated, there is potential to them, especially in-terms of usage.

    in a local business, with no multinational issues, running costs would be very low, just as all other living needs have low costs, therefore better customer support in regional setup, at a much cheaper costs. solutions would also be regional with marketing ppl not sitting in Islamabad but actually in the bazars of ppl its is actually targeting, hence cheaper better targeted solutions!

    The concept of Broad band is the same. In islamabad, i rank Micronet broad band as the best home service provider, not because they have largest national coverage, but because if i call them at midnight, they would reach my home at 10 am with a team to solve my issue.. it is like this for over an year.. try having this kind of service from PTCL…:)

    it may also be welcomed by Multi national telcos for letting MVNOs take front end where their cost of operations (customer support) is very high, like current terror struck areas and only focus on providing backend services.

    opportunities are unlimited!

  • a lot its basicaaly starts from uk where 6 mnvo operators r working but its not fruitful in paksitan caz the tariff r already cheap

  • mr originative – man havent i tell u thats its cheap my dear im saying its not benefical for paksitani customer.well my dear i already use virgin mobile in uk which uses tmobile network.its good for that areas coz the local calls r quite expensive on prepaid.from next time my bro plz watch the question clearly.thanks

    [Comment Edited]

  • Gud move by PTA for the growth of industry.
    It will generate more job opertunitu=ies.

    In simple words its just like using an internet card insted of using PTCL direct internet facility(dsl).
    It will be cheap n must be containing some offers like free air time & VAS etc

  • guys i forgot to notice the fee was in $US. My Bad!!

    PTA.. What were you thinking.. look at the national meesed up business envirnment we are in these days.. and you guys think u will get investors with this much amount of money.. damn!

  • I agree with Mufshad_Afridi Moblink is the best operating network in Pakistan and never had a problem while even if you are on roaming
    only one network mobilink in khyber agency…
    73% mobilink.
    27% 4network.

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