MVNO Licensing in Pakistan- How it Could Reshape the Telecom Industry

Pakistan is on the verge of implementing a Mobile Virtual Network Operator (MVNO) framework, aimed at fostering growth in the telecom sector by attracting new investments. The Pakistan Telecommunication Authority (PTA) has drafted the framework of MVNO Licensing and submitted it to the Ministry of Information Technology and Telecommunication for final approval.

MVNO Licensing in Pakistan- How it Could Reshape Telecom Industry

An MVNO is a telecom service provider that does not own its own network infrastructure or spectrum. Instead, it partners with an existing Mobile Network Operator (MNO) to offer mobile services under its own brand. MVNOs provide flexibility, competition, and innovation in the telecom market by introducing customized services tailored to different consumer needs.

Key Features of the MVNO Framework

The proposed MVNO framework in Pakistan introduces 15-year licenses for small companies, enabling them to operate independently while relying on MNOs for network access. These licenses can be renewed upon mutual agreement.

License Fee and Regulatory Costs

• The initial license fee for a nationwide MVNO license is set at $140,000 or its equivalent in Pakistani Rupees.
• Payments must be made upfront in US dollars or converted at the National Bank of Pakistan’s (NBP) Telegraphic Transfer (TT) rate from the day before the payment date.
• MVNOs will be subject to annual regulatory fees and contributions, including payments to the Universal Service Fund (USF) and Research & Development (R&D) funds.
• Inter-operator costs and PTA/Frequency Allocation Board (FAB) mandated fees are deductible from annual revenues. However, any costs charged by the MVNO back to the MNO are not deductible.

Types of MVNO Models

The MVNO framework outlines four different models, each with varying levels of service independence:

1. Reseller MVNO
   • Uses its own brand name and marketing but cannot install any network equipment.
   • Only resells the services of the parent MNO without additional features.
2. Service Provider MVNO
   • Handles branding, marketing, billing, and customer support.
   • Still relies on the MNO’s infrastructure and cannot install network equipment.
3. Enhanced Service Provider MVNO
   • Can introduce customized services while still depending on an MNO for core services.
   • Allowed to install limited telecom network elements.
4. Full MVNO
   • Offers complete independence, including branding, marketing, and core network elements.
   • However, it cannot own or operate the access network (radio towers and frequency spectrum).

Operational and Regulatory Guidelines

• MVNOs must sign commercial agreements with MNOs, which need PTA approval before operations begin.
• Quality of Service (QoS) is the responsibility of the MVNO, ensuring customers receive services that meet PTA’s benchmarks.
• MVNOs must establish customer service centers in cities where they operate and run a 24/7 nationwide helpline.
• MVNOs must ensure compliance with national security laws, including Lawful Interception (LI) and data record requirements.

Customer Rights and Service Continuity

• MVNOs must inform PTA at least three months in advance if they plan to discontinue services.
• MNOs cannot disrupt services to an MVNO without the PTA’s approval, ensuring continuity for end users.
• MVNOs own their customer base and are responsible for handling complaints, billing disputes, and lost/stolen device compliance.

Future Prospects of MVNOs in Pakistan

The approval of the MVNO framework could bring increased competition and greater service diversity to the telecom market in Pakistan. Consumers will benefit from tailored mobile packages, better customer service, and potential cost savings. Additionally, new businesses and international investors could find opportunities in the expanding digital economy.

With the final approval from the Ministry of IT & Telecom, Pakistan could soon see the emergence of multiple MVNOs, offering innovative and affordable services to millions of mobile users across the country.

See Also: PTA to Grant License for Fixed Satellite Services in Pakistan