'One Company, Two Budget Phones' Era... Telecom Subsidiaries' Budget Phone Competition Intensifies

KT Skylife Joins In, KT Alttelphone Market Share Expansion Inevitable
Network Usage Market Share: LGU+ 48, KT 30, SKT 22
Ministry of Science and ICT Sets Wholesale Price Reduction Conditions for Small Operators

[Asia Economy Reporter Han Jinju] With KT Skylife joining the MVNO (Mobile Virtual Network Operator) market, a 'one carrier, two MVNOs' system has been established. As MVNOs begin to be re-evaluated and competition intensifies, the market share competition among subsidiaries of telecom carriers is also expected to become full-fledged.

According to the Ministry of Science and ICT on the 2nd, the number of MVNO subscribers has increased for two consecutive months. As of September, there were 7,365,881 subscribers, an increase of 12,148 from the previous month. This is due to the high cost of 5G plans and the limited availability of services in some areas, leading to a rise in subscribers preferring MVNOs with unlocked smartphones.

Recently, with KT Skylife entering the MVNO business, competition to attract MVNO subscribers is expected to become even fiercer. The MVNO market includes 14 operators, including subsidiaries of telecom carriers. Major subsidiaries operating MVNO businesses are LG HelloVision and MediaLog (LG Uplus), KT M Mobile (KT), and SK Telink (SK Telecom).As of June this year, the overall subscriber ratio of telecom subsidiaries is only 37%, but they account for 65% of total sales. LivM by KB Kookmin Bank, which entered the market last year, has also attracted 83,000 subscribers, playing the role of a 'catfish' in the MVNO market competing with telecom subsidiaries.

Currently, the network share of telecom MVNOs is about 50% for LG Uplus, about 30% for KT, and 20% for SK Telecom. Following KT M Mobile, the leading MVNO operator, KT Skylife's entry is expected to expand KT's network share. From the perspective of small and medium-sized operators, KT Skylife's entry is unwelcome. There are concerns that KT Skylife, which has secured satellite broadcasting and wired broadcasting businesses, could dominate the market with bundled products including the MVNO business.

The Ministry of Science and ICT also imposed several conditions before approving KT Skylife's MVNO business. KT Skylife is prohibited from launching products below wholesale prices, and if it releases bundled MVNO products, they must be offered equally to other MVNO operators. The wholesale price for 5G plans provided by the parent company KT to other MVNO operators was lowered to match the level provided by SK Telecom, the wholesale service provider.

An industry insider said, "There is a view that KT Skylife is entering the market late and free-riding," adding, "Depending on whether they aim to poach telecom carrier customers through number portability or target small and medium MVNO operators, the positions of the MVNO industry and the Ministry of Science and ICT may differ." At the opening event of 'MVNO Square,' Kim Hyungjin, chairman of the MVNO Association, also pointed out, "Policies should be created to reduce the market share of telecom subsidiaries holding 50% of the MVNO market share and to have them withdraw after three years."

There are also calls to change the registration conditions for telecom subsidiaries' MVNOs. Currently, the Ministry of Science and ICT limits the total number of subscribers of telecom subsidiaries to within 50% of the total MVNO subscribers. Assemblyman Jo Myunghee of the People Power Party pointed out at the Korea Communications Commission audit that it should be changed to '50% of subscribers using the telecom carrier's network.' Currently, the combined subscriber ratio of telecom subsidiaries is only about 37%, but if applied by individual telecom carrier network subscriber ratios, LG Uplus would be unable to secure additional subscribers. The industry suggests that this proposed change is a move by competing carriers to block subscriber expansion by a specific telecom carrier. There are concerns that this could hinder the expansion of the MVNO market and turn into a turf war among competitors.

An industry insider said, "The primary purpose of the MVNO business is to compete among operators to offer affordable plans that attract users' choices," adding, "Lowering wholesale network prices and providing support measures can offer practical benefits to small and medium-sized operators."

This content was produced with the assistance of AI translation services.