PAKISTAN is no stranger to the sharing economy, yet a recent news item about big changes in the country`s burgeoning telecom sector likely slipped the public`s attention. This Wednesday, the PTA notified a policy framework for Mobile Virtual Network Operators, allowing a new type of service provider to enter the Pakistani market. Under the framework, smaller, `virtual` companies can start offering mobile telecommunication services to Pakistani users. The authorities are hoping that the policy will encourage greater competition and benefit both users and existing companies. Newer, smaller companies can enter and compete on the basis of their customer service and innovative packages for end users, and they will not need to set up new infrastructure or buy spectrum licences.

Instead, they can buy network capacity in bulk from the existing players on wholesale rates and resell it under their own brand name. In short, they will `share` infrastructure and spectrums with bigger players. The barrier to entry for MVNOs is mainly the $140,000 licence fee. That is not a lot, considering the kind of investment it used to take to establish a cellular network. It sounds like a lucrative deal for interested parties.

But though this looks like a promising step forward, the regulatory authority will still need to midwife the transformation it is hoping to trigger. Many other countries have previously experimented with MVNOs; some successfully, others less so. Drawing on their experiences, Pakistan should try to provide as enabling an environment as possible. This will include setting fair pricing benchmarks for the market between new operators and existing players, so that newer companies have a fair chance to profit. Further, as pointed out by one expert, a point the regulator must reconsider is its decision to compel MVNOs to use the same number prefixes assigned to the company they sign a deal with, as this might inadvertently position the new companies as sub-brands of the parent network operator, given the strong association of each `03xx` prefix with one of the big players. That would complicate a new company`s efforts to establish itself as a distinct player. The government should take these concerns seriously and treat the opportunity with enthusiasm. The temptation to net quick gains through licence fees will be strong, but a solid policy can yield dividends for years to come for both users and operators.