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Abstract

Pakistan Telecommunication Authority has failed to come up with any frame work for Mobile Virtual Network Operator (MVNO). According to Mobile Cellular Policy, PTA was due to prepare a detailed guideline and procedures for MVNO before January 28, 2006. For those who are not familiar with MVNO, let me define this phenomena for you. A mobile virtual network operator (MVNO) is a cellular company that provides mobile/landline phone services but does not have its own network. They buy traffic (huge minutes) on wholesale rate from cellular companies and then resale them with their own brand name and prices to end users. MVNO companies are not sufficiently required to install their physical network. However, they normally have their billing system along with customer support and other departments. Now getting back to its applicability in Pakistan, Mobile Cellular Policy that was approved by the government of Pakistan clearly says that cellular companies will be permitted to allow MVNOs operators in the country. Despite of couple of failure examples, MVNO is largely accepted and encouraged by regulatory authorities globally. Not only this, telecom companies like MVNO model too, as they help them grow their network. Through sources, and discussion, I have come to know that Mobile Zone has been showing great interest for last couple of years to get an MVNO license in Pakistan. But the sluggish attitude by PTA and even some mobile companies are not favoring idea of MVNO; the sector is yet to see any MVNO operator in the country.

Introduction to MVNO
An MOBILE VERTUAL NETWOK OPERATOR (MVNO) is setup by an organization that has the scale to the market and distribute mobile devices but for financial or operational reasons does not want to invest in setting up radio network by making a whole sale deal with an MOBILE NETWOK OPERATOR (MNO) to provide network services the virtual operator only need to setup and operate their core business. The MVNOs customer will buy their mobile phone from the brand and walk around day all day along with your brand in their pocket, while the host network runs the day to day operation of the business.

And now, MOBILE VERTUAL NETWOK OPERATOR (MVNO) is a new trend for mobile (cellular) business model. Many are familiar with simple resellers of telecom services such as long distance, local exchange, and mobile network services. In contrast, MVNO's typically add value such as brand appeal, distribution channels, and other affinities to the resale of mobile services.

The major benefit to traditional mobile operators cooperating with MVNO's is to broaden the customer base at a zero cost of acquisition. It is likely that incumbent mobile operators will continue to embrace MVNO's as a means of deriving revenue to offset the enormous cost of building 3G networks. As more MNVO's expand in the marketplace, they are likely to first target prepaid customers as a means of low cost market entry themselves. Most regulating bodies are in favor of MVNO's as a means of encouraging competition, which would ultimately lead to greater choice and lower prices. With the advent of the MVNO, many incumbent mobile operators will evaluate the opportunity to offer supplementary MVNO services of their own. To do so, exiting mobile operators will use their established branding, service knowledge, and supplier relationships to complete against independent MVNO's.

Global View of MVNO


The MVNO market kicked off way back in 1990-91, when a number of players rented capacity on the networks of existing MNOs. The ve ry first MVNOs copied almost everything from MNOs establishing shops, subsidizing terminals and then marketing themselves as operator number 3, 4 or 5 in their local market.

The company was the world's first Mobile Virtual Network Operator, launched in the UK in 1999 now has over 4 million customers in the UK. Its success was replicated in the US, but ventures in Australia have not been so successful, and failed in Singapore, albeit with a different strategy

The first MVNO using the full definition was created by Tele-2 in Denmark and subsequently rolled out in several European markets. This model formed the basis between co-operation between Tele2 in Sweden and Telia, created when Telia failed to obtain a 3G license in their home market Countries including Germany, Netherlands, France, Denmark, United Kingdom, Finland, Belgium, Australia and United States have the most MVNO`s. In these countries the MVNO marketplace is stabilizing and there are some well known successes. Other countries, such as Russia, Portugal, Spain, Italy, Baltic`s, India, Ireland and Austria have recently launched MVNO business models

MVNO in Pakistan
PTA came up with brand new idea for allowing other operators to work in 803,940 km in Pakistan. They are going to issue licenses to virtual mobile network operator. Virtual!!According to definition from PTA, a Mobile Virtual Network Operator (MVNO) is an operator that does not own any spectrum; instead, MVNOs have commercial arrangements with conventional Mobile Network Operators (MNOs)

For provision of mobile communication services to their own customers the PTA has now fixed an initial license fee for an MVNO of $5 million or equivalent to Pakistani rupees, originally set at $10,000 then revised to $10 million.

The News has learnt that the PTA has published guidelines for the MVNO license. Around the world, including the US, the UK, Hong Kong and many other countries, there is no license fee for MVNO operator. .As of now, we are not sure if there is anyone interested in having MVNO license in Pakistan, however, 3/4 years ago there were investors interested in MVNO, such as Mobile Zone group and few others.

Problem Analysis

Why Mobile Virtual Network Operator (MVNO) business has not yet launched in Pakistan.

Research Objectives
Future of MVNO business in Pakistan
Frame work of PTA for MVNO Threats for MVNO Benefits of MVNO

Limitations