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One year later, the Ministry of Information Technology and Telecommunication still has not approved the Mobile Virtual Network Operator (MVNO) framework, which was supposed to be finalized before the spectrum auction.
Sources privy to TechJuice indicate that the primary goal of the MVNO framework is to clarify the necessary spectrum, facilitating informed and efficient decision-making during the auction process. The Pakistan Telecommunication Authority (PTA) had drafted the MVNO framework and submitted the final version to the ministry for approval. However, after nearly a year, the ministry has yet to take action.
The framework aims to promote further growth in the telecom sector by creating opportunities for new investments. It proposes 15-year licenses for small companies, allowing them to operate under their own brand names and offer customized services.
The initial license fee for a nationwide MVNO license will be $140,000, payable upfront in Pakistani rupees at the National Bank of Pakistan’s Telegraphic Transfer (TT) selling rate prevailing on the day before payment.
Parent MVNOs will be required to pay all annual regulatory fees and contributions, including the Universal Service Fund (USF) and Research & Development (R&D) fees. These will be calculated on the aggregate annual gross revenue from the combined licensed services of both the Mobile Network Operator (MNO) and the MVNO. Inter-operator costs and PTA/FAB-mandated payments may be deducted from annual gross revenue; however, any cost charged by an MVNO back to an MNO will not qualify as a deductible expense.
The MVNO license will be issued for an initial 15-year period, renewable upon mutual agreement. If an agreement between an MVNO and its parent MNO is terminated before the license term expires, and the MVNO does not have another valid agreement, the license will be suspended. It can be restored once a new valid agreement is submitted to PTA.
An MVNO is a telecom operator that does not own any spectrum but instead has commercial arrangements with MNOs to provide mobile communication and next-generation mobile services under its own brand. The framework aligns with Clause 9.11.1 of the Telecommunications Policy 2015, allowing MVNO services in Pakistan.
Under the framework, MNOs can enter into agreements with one or more MVNOs, and vice versa. The agreement will define the scope of MVNO operations, which must align with PTA-approved models.
MVNO Models
- Reseller: Uses its own brand and marketing but relies entirely on the parent MNO’s services without installing network equipment.
- Service Provider: Similar to a reseller, but can handle its own billing and customer care.
- Enhanced Service Provider: Offers customized services and may install limited network elements.
- Full MVNO: Provides all services offered by MNOs, including its own core network elements, except access network components.
MNOs and MVNOs must jointly submit technical and business plans, along with draft agreements, for PTA approval. Once approved, these agreements cannot be altered without the PTA’s consent.
The MVNO will be responsible for maintaining the quality of service and customer satisfaction, ensuring compliance with PTA benchmarks. Each MVNO must establish at least one customer care centre per operational city and maintain a 24/7 nationwide helpline.
Additionally, MVNOs must comply with national security requirements, including lawful interception, data management, and SIM activation/deactivation protocols as set by the PTA.
Parent MNOs will be required to maintain uninterrupted service for MVNOs and cannot alter or discontinue service without PTA’s prior approval. Likewise, MVNOs cannot halt their services without at least three months’ notice and PTA consent.
MVNOs will also be required to comply with the PTA’s Device Identification Registration and Blocking System (DIRBS) and ensure safeguards against lost or stolen devices.
