South Korean Government to Come up with Plans to Vitalize Mobile Virtual Network Operators during the 5G Era

Mar 23, 2020

Ministry of Science and ICT (MSIT) is planning to establish measures that will vitalize mobile phones provided by mobile virtual network operators (MVNO).
It is heard that the MSIT is preparing various cards such as reduced radio wave fee that will support such mobile phones.
According to South Korea’s MVNOs, it has been confirmed that the MSIT is gathering opinions and conducting research in order to prepare measures that will vitalize mobile phones provided by MVNOs.
It is said that the MSIT is preparing a draft by looking for support measures based on government support and business collaborations in order to strengthen the competitive edge of services provided by MVNOs and gathering opinions from the industry. It is expected that the MSIT’s measures will be different from current policies based on wholesale prices of mobile phones provided by MVNOs.
It is likely that the MSIT will come up with plans that will vitalize 5G smartphones provided by MVNOs.
As LG Uplus and KT lowered their prices of using their 5G networks to 66%, MVNOs have been releasing 5G smartphones. SK Telecom is also finalizing its final review on rates and others after deciding to provide its 5G network at a wholesale price.
It is expected that the MSIT’s draft will include information regarding preparing a groundwork so that MVNOs can borrow 5G networks without any setback and supporting MVNOs with releasing their 5G smartphones in time.
The MSIT is also expected to prepare a plan to have smooth supply and demand of 5G smartphones for MVNOs. MVNOs believe that 5G smartphones are absolutely necessary in order to vitalize 5G mobile phone services provided by them.

MVNO services provided through a post office <MVNO services provided through a post office>

The MSIT has started looking for ways that will deliver 5G smartphones to MVNOs smoothly and effective mobile phone distribution channels and methods including 3G and LTE.
It is also expected that the MSIT will materialize a plan that will reduce the current radio wave fee for small and medium MVNOs. Radio wave fee reduction policy that is also included in this year’s business report will be determine through the MSIT’s measures for vitalizing the MVNO industry.
The annual amount of radio wave fee for MVNOs is around $27.9 million (35 billion KRW) and it has been extended until the end of this year after discussions with Ministry of Economy and Finance. MVNOs are requesting a long-term reduction rather than annual reassessment in order to remove any uncertainty.
It will be interesting whether the fee will be reduced as a whole or will be different between big companies and small and medium companies.
In addition, new policies regarding additional services such as bundle products and membership services that are seen as weaknesses of MVNOs are also mentioned. It will be also interesting to see whether the MSIT will include measures that will help vitalize the market such as prevention of unfair acts by mobile telecommunications companies stealing members of MVNOs through support funds.
Some believe that such preparations to vitalize the industry are premature. However, the MSIT believes that it needs preparations to expand choices for MVNO users as the market base is expanding.
The MSIT is planning to strengthen the competitive edge of MVNOs through proactive policies and help vitalize the market.
“We are still in a beginning stage of coming up with plans to vitalize the industry and we have not finalized on anything yet.” said a representative for the MSIT.
Staff Reporter Park, Jisung | jisung@etnews.com

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