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. After all, 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.