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).