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ISLAMABAD: The Ministry of Information Technology and Telecommunication has delayed the approval of Mobile Virtual Network Operator (MVNO) framework, which was supposed to come out before the spectrum auction. Sources revealed that the main objective of the MVNO framework was to give a clear picture of required spectrum and could make informed and easy decision in spectrum auction.
Pakistan Telecommunication Authority (PTA) had drafted the framework for MVNO and submitted the final draft to the ministry for approval. However, after the passage of significant time, the ministry has yet to approve the framework. The Framework envisaged further growth of the telecom sector by providing opportunities for new investments. The MVNO framework proposes 15-year licenses for small companies, allowing them to operate under their brand names and offer customized services.
The initial license fee for a nationwide MVNO license will be US Dollar One Hundred and Forty Thousand (US $ 140,000) or its equivalent in Pak Rupees. The initial license fee shall be paid upfront in US dollars or its equivalent in Pakistani rupees to be converted at the National Bank of Pakistan (NBP) Telegraphic Transfer (TT) selling rate prevailing on the day preceding the date of payment.
Parent MVNO shall pay all annual regulatory fees and contributions, including USF and R&D, calculated on the aggregate amount of annual gross revenue from combined licensed services of MNO and MVNO. Interoperator costs and PTA/FAB mandated payments shall be eligible to be claimed as a deduction from annual gross revenue from licensed services of MNO. However, any cost charged by MVNO back to MNO will not be an eligible deductible expense for MNO in the calculation of annual regulatory fees and contributions.
The MVNO license shall be issued for an initial period of 15 years, which can be renewed, subject to the provision of mutual agreement between the parties. If the agreement between MVNO and parent MNO is terminated for any reason before the license term of 15 years and MVNO has no other valid agreement with any other or same MNO, the MVNO license will be suspended; if the MVNO provides a valid agreement with another or same MNO, the license will be restored. In case of termination, MVNO has to ensure and complete all legal and codal formalities.
The MVNO is an operator that does not own any spectrum; instead, MVNOs have commercial arrangements with conventional Mobile Network Operators (MNOs) for the provision of Mobile Communication Services and Next Generation Mobile Services to their own customers. This framework allows MVNO services in Pakistan in light of clause 9.11.1 of Telecommunications Policy 2015.
An MNO shall be allowed to make commercial agreements with single/multiple MVNOs. Further, an MVNO shall also be allowed to make commercial agreements with single/multiple MNOs. The agreement between MNO and MVNO will define the scope of operations of MVNO; however, the scope of operations shall remain in line with MVNO models.
A brief description of the MVNO models is as follows:
- Reseller: The MVNO will be allowed to use its own brand name, marketing strategies, and sales; however, it will only be allowed to market the services being offered/provided by the parent MNO and will not be allowed to install any radio or core network equipment
- Service Provider: The MVNO will be allowed to use its own brand name, marketing strategies, customer care, and billing; however, it will only be allowed to market the services being offered/provided by the parent MNO and will not be allowed to install any radio or core network equipment.
- Enhanced Service Provider: This category of MVNO may provide its own customised services in addition to the services provided by the parent MNO and will use its own brand name and marketing strategy. This category may install telecom network elements restricted to its own model.
- Full MVNO: A full MVNO will be allowed to provide all types of services as provided by MNOs, which include branding, marketing, and installing its own core network elements, except access network elements.
MNO and MVNO shall jointly submit to the Authority a technical and business plan along with a draft commercial agreement between MNO and MVNO as per the checklist. The applicant shall be granted an MVNO license after fulfilment of all codal formalities.
MVNOs shall be allowed to install their own network elements depending upon the scope of operations agreed upon as per the agreement with the parent MNO duly approved by the Authority. Further, the agreement, once approved by PTA, shall not be changed by any party without prior approval of PTA.
Quality of Service shall be the sole responsibility of MVNO. Since MVNO shall hold its own brand name, consumer ownership, and market its own SIMs, it must ensure that its users receive good quality of service as per benchmarks set by PTA. MVNOs, while entering into an agreement with MNO(s), shall look into this aspect, and individual responsibilities in this regard should clearly be pronounced in the document.
MVNO shall be responsible to fulfill the national security requirements. Appropriate clauses will be included in the agreement to ensure efficient resolution of issues related to security, Lawful Interception (LI), data records etc. and terms and conditions for activation/de-activation of SIMs as set by PTA and its amendments thereto, prior to commencement of its commercial services.
Once an MVNO commences its services, the MNO shall provide service to MVNO without interruption. Also, the parent MNOs shall not degrade, suspend, discontinue or terminate any service provided to MVNO or take any measures which affect the delivery of service to MVNO without prior approval of PTA. Similarly, MVNO shall not stop the provision of services to its customers without at least a three months notice and prior approval from PTA.
As MVNO will hold the ownership of its customers, it will be responsible for making necessary arrangements to facilitate them. The MVNO shall address the complaints of its own users and for this purpose shall establish at least one customer care centre in each city of its operation and a 24/7 nationwide helpline.
MVNO shall be required to take action against its customer related to its services as required under the prevailing law. MVNO shall be responsible for the resolution of billing or other disputes with its customers as per its scope. The MVNO shall submit its Code of Commercial Practice and Standard Contract of Service to PTA for approval and shall follow the same in true letter and spirit. MVNO shall ensure necessary safeguards are in place to abide by PTA’s DIRBS and loss/stolen device requirements.
