IT ministry, PTA Differ on MVNOs License Fee

The Pakistan Telecommunication Authority (PTA) and the Information Technology & Telecom ministry have developed differences over the Mobile Virtual Network Operators’ licence fee, reported Dawn today.

According to a framework developed by the IT ministry for MVNOs, the licence fee should be $10,000, while the PTA is insisting on $5 million fee.

The MVNO is an operator that does not own any spectrum (frequency) but can deploy minimal or extensive infrastructure. They would have business arrangements with exiting mobile network operators for provision of mobile communication services for their customers.

Under the framework, the MVNOs would buy wholesale voice and data services at discount rates from cellular companies to resell them with their own brand name and prices to end-users.

“Since the MVNOs do not have to acquire their own spectrum as they will be relying on MNOs, there is no justification for demanding huge fee from them (MVNOs),” an IT ministry official said.

“The initial approach is to encourage competition and new entrants in the market, but by imposing huge licence fee, the regulatory authority seems to be interested in discouraging applicants on the pressure of a couple of operators,” said a source. A PTA official said a number of expressions of interest (EoI) have been pouring in with regard to MVNOs. He, however, did not comment on the fee issue.

In the framework prepared for MVNO by MoIT, it said

The level of upfront/recurring fee for MVNOs be kept to a minimum level. Upfront fee may not exceed USD 10,000, Minimum annual recurring charges be defined in the template.

High MVNO license by PTA fee has put investors on halt regarding the MVNO options in the country. While on other hands, Cellular firms are enjoying less competition and more freedom with this act of PTA. One may not rule out the fact that authority made its decision on MVNO license fee on the say of selected cell phone companies.

Whatever the case is, MVNO is a forgotten venture, unless license fee structure is re-considered. MVNOs could play positive role in the development of telecom industry of Pakistan, otherwise.

Click here for MVNO Framework Draft by MoIT, that was issued back in 2007. PTA re-organized it and presented to industry in late 2009, copy can be downloaded by clicking this link.

Tech and telecom reporter with over 15 years of experience, he works as founder of ProPakistani.PK

  • I think 5 Million is too much and 10,000 USD is too less.. It should be around 100,000 USD.

  • why PTA is much hungry… as $5 million is so big amount if u compare it with $10,000…
    anyhow they know better what is best 4 them….

  • agreed with adam i think 1million or max 2 million is enough for them because they will get huge business from pakistani market in the form of VAS and SMS services and definitely give good competition to operators…10,000 dollars are very less amount…

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