After years of bureaucratic delays and regulatory bottlenecks, the Pakistan Telecommunication Authority’s (PTA) Mobile Virtual Network Operator (MVNO) policy is finally moving forward. The final framework has been vetted by the Ministry of Law and Justice, integrated with feedback from the Ministry of IT and Telecommunication, and is now ready for presentation to the federal cabinet. This move signals a potentially transformative shift in Pakistan’s telecom sector by allowing new players to launch mobile services without owning physical network infrastructure.

What Are MVNOs and Why Do They Matter?

MVNOs are service providers that lease access to existing telecom networks instead of building their own towers and core systems. Operating on a model widely adopted in global markets such as the US, UK, and India, MVNOs purchase wholesale network access from licensed Mobile Network Operators (MNOs) and independently handle branding, customer care, and service offerings. In theory, this model can increase market competitiveness, improve service diversity, and bring much-needed consumer-centric innovations to Pakistan’s telecom landscape. The revised policy, finalized by PTA in mid-2024, slashed the MVNO license fee from a steep $5 million to a more accessible $140,000 and extended the license duration to 15 years, strategic changes clearly aimed at attracting startups, tech companies, and international service providers.

Can MVNOs Succeed Where Telcos Have Struggled?

The new policy presents several key advantages. It lowers entry barriers, allowing smaller or niche players to enter a market that has long been dominated by a few major telecom companies. By emphasizing customer service and flexible packages, MVNOs can introduce differentiated offerings tailored to specific demographics, whether youth, rural consumers, or digital-only users. Moreover, the model promotes more efficient utilization of existing infrastructure, potentially improving connectivity in underserved or remote regions without demanding massive new investments in physical networks. The PTA has also included provisions to oversee and approve commercial agreements between MNOs and MVNOs to maintain regulatory fairness, which may help prevent monopolistic behavior.

Despite these promising elements, there are structural weaknesses and looming uncertainties that cannot be overlooked. The prolonged delay in implementation despite the framework being ready since June 2024 raises valid concerns about bureaucratic inertia and the government’s ability to keep pace with sectoral innovation.

Adding another layer of complexity is the current state of mobile service quality in Pakistan. Most existing operators continue to fall short of the quality benchmarks set by PTA, especially in terms of call drop rates, data speeds, and coverage consistency. In this scenario, where infrastructure investment has stagnated and service enhancement has remained largely cosmetic, the entry of MVNOs who will be entirely reliant on the same underperforming networks raises serious concerns. If new players are leasing capacity from MNOs that are already struggling to maintain acceptable quality, it risks diluting the experience further for both existing and new customers. This may lead to a race to the bottom if MVNOs, in pursuit of cost savings and rapid user acquisition, compromise on performance or customer support.

Furthermore, while MVNOs are often hailed for extending inclusion, especially in rural or underserved areas, their effectiveness in such regions remains questionable. Weak or absent telecom infrastructure in these regions means that MVNOs may have little to no usable capacity to lease in the first place. Without parallel investment in rural connectivity by MNOs or targeted incentives from regulators, MVNOs might simply ignore these areas altogether, reinforcing the very digital divide the policy aims to address.

Another gap in the current framework is its lack of direct incentives or mandates for MVNOs to serve rural or low-income populations. While broader coverage is a stated benefit, nothing in the policy actively pushes operators to invest in areas where profit margins may be lower. This oversight could lead to a scenario where MVNOs merely replicate urban-centric models rather than expanding true digital inclusion. There’s also the risk of market saturation if new players simply copy existing data and voice plans without meaningful differentiation, leading to price wars and short-lived operations.

Pakistan’s New MVNO Policy: What More Needs to be Done?

To ensure the success of the MVNO policy and to truly enhance the telecom landscape in Pakistan, several strategic improvements are necessary. First, there must be enforceable minimum quality-of-service (QoS) standards included in the commercial agreements between MVNOs and Mobile Network Operators (MNOs). Given that MVNOs will depend entirely on the infrastructure of existing operators, many of whom already fail to meet PTA’s benchmarks. It is therefore critical that MVNO users are not subjected to subpar service. These agreements should be regulated by PTA and include transparent QoS metrics that are made publicly available, enabling consumer accountability and pressure for performance improvements.

Secondly, to address the longstanding issue of weak infrastructure in rural areas, the government should implement mandatory infrastructure-sharing regulations. This would allow MVNOs equitable access to towers and transmission lines, particularly in regions where building parallel infrastructure is not viable. The Universal Service Fund (USF) should be leveraged more effectively to provide financial incentives or subsidies to MVNOs that commit to operating in underserved areas, ensuring that digital inclusion becomes a reality rather than a slogan.

Thirdly, a tiered licensing model could be introduced to differentiate between urban-focused MVNOs and those targeting rural or low-income communities. This model could include lower license fees or added incentives for MVNOs that are targeting rural areas. By doing so, the government can create a more inclusive and diversified market.

Finally, there should be a mechanism for regular evaluation of the MVNO policy’s impact. PTA must conduct annual public reviews assessing service quality, market performance, and rural penetration. These evaluations should be data-driven, transparent, and involve both industry and consumer feedback to ensure the framework evolves to meet real-world needs.

Without these enhancements, the MVNO policy risks being a nominal reform, unable to address Pakistan’s deeper telecom challenges or deliver the competition and inclusion it promises.