Pakistan’s MVNO Cooperation Paradox
At the start of July, the merger between Pakistan’s Telenor and Ufone formally closed, reducing the mobile market from four national operators down to three. According to the Pakistan Telecommunication Authority’s June figures, this means that Jazz holds around 36.3% market share, the merged entity, which will trade under the e& brand, around 36.0%, and Zong around 26.7%. Meaning, Jazz’s lead over the new number two is just less than half a percentage point.
At almost the same time as the merger closed, the Pakistan PTA opened applications for MVNO licences. Since then, enquiries to our team have centred on which route-to-market strategy to follow, given the significant drop in the licence fee from $5m to $140,000 and some of the licensing framework arrangements that are in play.
What’s driving this?
Usually, MVNO licensing is opened when a regulator wants to rebalance competition after
consolidation has handed a single operator significant market power. Pakistan’s timing fits that pattern almost too neatly: the licensing window opened in late June, days before the merger closed. But the framework itself tells a different story. It carries no reference offer, no access pricing, no wholesale obligation of any kind. Whatever it is, it isn’t a remedy.
The real drivers sit upstream, in economic policy. Uraan Pakistan, the government’s National
Economic Transformation Plan 2024–29, makes “E-Pakistan” one of its five pillars and hangs an
ambition to double exports to around $60 billion by 2029 on digitalisation.
The Digital Nation Pakistan Act, in force since January 2025, created the Pakistan Digital Authority under a commission chaired by the Prime Minister. Both need digital services to reach people that telco retail hasn’t.
With the sector past 200 million subscribers and growth now coming from data rather than SIMs,
MVNOs are the cheapest instrument available: fintechs, ISPs, cable operators and technology firms brought into mobile without a rupee of new spectrum or infrastructure.
This is growth policy wearing competition policy’s clothes and is precisely why the wholesale terms were left to the market.
No regulated wholesale access
As approvals and integration work for the merged entity progress, we could expect to see some regulatory remedies tied to it. Until then, and unlike other jurisdictions around the world, Pakistan hasn’t introduced regulated wholesale access.
MNOs are under no obligation to accept MVNO applications, publish wholesale pricing or offer standard commercial terms. They decide who they partner with, on what terms, and at what price.
For MVNOs, this means entry depends on finding an MNO partner willing to use MVNOs to reach a market segment they can’t otherwise serve, and one who will offer fair terms.
Narrow safeguards
The safeguards that do exist are narrow. An MNO cannot degrade, suspend or terminate an MVNO’s service without PTA approval. And every commercial agreement must be submitted to PTA and approved before it takes effect. Once approved, neither party can change it without PTA’s written consent.
That is protection of a kind, but it is procedural, not economic. Nothing in it guarantees fair wholesale pricing. It also cuts both ways: an MVNO that negotiates badly will not be walking away from that agreement quickly.
Proving strategic value is critical
It means every MVNO needs to prove the value they will bring in terms of incremental subscribers and be ready to negotiate terms that make the ambition a reality. More importantly, every operator will need to set fundamental strategic foundations to ensure participation in the new MVNO era supports growth.
It’s worth noting that MNOs who have done this in other parts of the world use a strategic scorecard for the type of MVNOs they will partner with. This gives clarity of purpose, enables the wholesale teams to understand who they should work with, and gives clear strategic reasons to MVNOs and regulators why an MVNO may not have got a deal.
There are some ‘watchouts’ for MNOs in all of this. Price too high, or with too many complex clauses and not enough support built in, and MVNOs could fail before they even start. Not only that, if MVNOs discover there are better terms to be had elsewhere, they will leave at the first opportunity the agreement allows.
Getting this right is crucial. Let’s not forget, MVNOs don’t come in one size. Full, light, MVNE-enabled and even MVNA models are all viable options. The framework itself is silent on this. It licenses a single MVNO category and says nothing about technical models, so which of them gets built in Pakistan is a matter of MNO strategy, not regulation. And that strategy could be just as varied as the models themselves.
What paths might the remaining MNOs follow?
For Jazz, the market leader, wholesale could become a strategic imperative. It’s a controlled way of expanding into adjacent customer segments (ie ones it can’t reach otherwise) and do so without diluting its own retail brand. It’s also a way to protect retail margins, a perpetual problem for operators everywhere.
Above all, Jazz needs to be acutely aware it can’t operate in a vacuum. The ‘prisoner’s dilemma’ can’t be overstated, and the margin here is thinner than most. With less than half a point separating Jazz from the merged entity, a single well-executed MVNO deal on a competitor’s network could change who leads this market. It therefore makes sense to have the traffic remain on its network, with control of the deal and value through wholesale pricing, rather than be a victim of a competitor’s strategy.
For Zong, which has a lower market share, wholesale could be exactly what it needs. Following an MVNO strategy would open the distribution channel and help drive incremental growth in a mature market.
In our experience, the smallest operator almost always has the most aggressive wholesale strategy. They have the most to gain and the least to lose. Virgin Mobile proved this when it became the world’s first major MVNO. It happened because One2One, later T-Mobile UK, was the smallest operator in the UK in 1999, and was full of growth ambition.
Whereas for e&, there’s a different dilemma. Does it use wholesale to shore up revenue in a business going through massive upheaval, bringing two brands, sets of processes, employees and infrastructure together? Or does it wait, get the foundations right, but risk missing the MVNO boat?
It could viably take an easy route and only offer full MVNOs, assuming it has the capability to do the technical integrations to make it happen.
Fortune rests on multiple factors
For each of the operators, the answer will have a material impact on their own fortunes and on the overall market’s success. Pakistan’s economic and digital ambitions set a new tone for mobile, especially in a market which can no longer rely on subscriber growth.
When you look at other regions around the world using MVNOs to unlock innovation and growth, success has come down to multiple factors. There’s never one single golden arrow.
Brand differentiation from the competition, targeting a clear market segment with an innovative offer, managing channel costs and changing the overall model are all as important as each other.
It’s also worth noting that in less developed markets there is always initial success with price challengers, but this isn’t sustainable in the long term. And absolutely nothing is possible until the market has foundation commercials that enable a reasonable level of margin to fuel business growth.
MNOs are not competing with MVNOs.
Pakistan faces a competitive dynamic it hasn’t seen before, and strategy directors need to reframe their thinking. This isn’t about MNOs competing with MVNOs. It is about MNOs competing to attract the MVNOs that will deliver incremental customers to their network and deny competitor networks the chance to take customers from their existing base.
That is the paradox at the heart of this market opening. The regulator has opened the door to competition but made cooperation the only way through it, leaving the terms of cooperation entirely to the operators that the newcomers will compete against.
Operators therefore need to set out what type of MVNOs they want to attract, and how. But most of all they need to commit and get it right first time. Afterall, fortune favours the brave.
What’s your strategy? If you need help determining your wholesale approach, then get in touch.
We’ve done this analysis and strategic development in numerous markets facing the same market shift, with countless success stories to show for it.
