Monitoring Desk
ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has ordered Pak Telecom Mobile Limited (PTML), the operator of Ufone, to immediately stop new ONIC sales, activations, SIM/eSIM issuance, subscriptions and marketing, after determining that the digital telecom service falls within the Mobile Virtual Network Operator (MVNO) framework and requires a separate licence.
According to the PTA order, PTML has been directed to cease the specified ONIC operations immediately and submit a comprehensive compliance report within seven working days, detailing the steps taken to implement the regulator’s directions.
The regulator’s decision effectively settles a long-running regulatory question over whether ONIC operates merely as a digital brand of PTML or functions, in substance, as an MVNO.
The PTA has not ordered the disconnection of existing ONIC subscribers. Under the order, existing customers will be given three months from receipt of the decision to be migrated or transferred to PTML. The regulator has made clear that this transition period is intended to protect existing subscribers and does not permit ONIC to continue acquiring new customers during the period.
The PTA has given PTML two broad options for bringing ONIC into compliance. The company can restructure ONIC as an unambiguous PTML product or brand, removing the characteristics that make it operate as an independently structured virtual operator, or it can retain the existing operating model and obtain an MVNO licence.
The regulatory finding is significant because ONIC was launched in 2023 as a digitally focused telecom service under PTML. At the time, the central regulatory question was whether its operations constituted a new digital brand of an existing mobile network operator or an MVNO requiring a separate regulatory licence.
PTML has maintained that ONIC is a digital brand of the company rather than an independent MVNO. However, the PTA’s latest determination focuses on the substance of ONIC’s operations and commercial arrangements rather than the branding used by PTML.
The regulator accepted that PTML owns ONIC and retains control of the underlying network, spectrum and numbering resources. However, it found that ONIC’s operational structure goes substantially beyond a conventional brand arrangement.
According to the PTA order, ONIC operates customised packages along with separate customer relationship management and billing systems and dedicated digital and customer-care platforms. The regulator also examined the role of DTMS, a separate entity involved in significant operational functions including marketing, customer acquisition, KYC-related processes, SIM logistics, sales and customer services.
The financial arrangement between PTML and DTMS was also a key factor in the regulator’s assessment. Under a Build-Operate Services Agreement (BOSA), DTMS receives 55 percent of relevant revenue during the first three years, with its share subsequently declining according to the agreed schedule.
The PTA considered the combination of revenue sharing and the extensive operational role performed by DTMS as significant in determining the nature of ONIC’s operations.
The regulator also raised concerns relating to SIM issuance and KYC, customer and subscriber information, billing, lawful interception, data localisation and security, quality of service, disaster recovery, business continuity and third-party arrangements.
The order further noted that independent verification relating to disaster recovery and high-availability testing, including RTO/RPO requirements and service-level agreement performance, had not been fully demonstrated, while certain arrangements involving DTMS had not been completely placed before the Authority.
Taken together, the PTA concluded that the structure and functioning of ONIC bring the service within the scope of the MVNO Policy Framework 2025.
The decision follows regulatory and legal proceedings that began shortly after PTML notified the PTA of its plan in June 2023 to launch ONIC as an app-based digital product in Karachi, Lahore, Islamabad, Rawalpindi and Faisalabad.
The PTA subsequently directed PTML in August 2023 not to launch ONIC until complete information had been provided for regulatory evaluation. PTML challenged the regulator’s direction before the Islamabad High Court.
In February 2026, the Islamabad High Court converted PTML’s petition into a representation and returned the matter to the PTA for a reasoned decision. The latest PTA order represents the regulator’s decision following that process.
The financial implications of the regulatory route have also changed significantly since the dispute first emerged.
Under the earlier regulatory framework, the initial national MVNO licence fee was $5 million. The federal government’s MVNO Policy Framework 2025 has subsequently reduced the initial national licence fee to $140,000.
In addition to the initial licence fee, MVNOs are subject to ongoing regulatory obligations, including a licence fee equivalent to 0.5 percent of gross revenue, a 1.5 percent contribution to the Universal Service Fund and applicable research and development charges.
The change substantially reduces the upfront financial barrier that previously separated operating a digital telecom service as a brand from operating it as an independently licensed MVNO.
For PTML, the latest order therefore presents a regulatory compliance decision rather than simply a question of branding. The company must either modify ONIC’s structure so that it clearly operates as a PTML product or obtain the licence and comply with the regulatory obligations applicable to MVNO operations.
Until the matter is resolved, the PTA’s order bars ONIC from undertaking new sales, activations, subscriptions, SIM or eSIM issuance and marketing activities covered by the decision, while existing subscribers have been provided a three-month window for migration or transfer.