1.2 Million Number Portings to Affordable LTE Plans Even with 5G Phones... Budget Phone Users Increasing

[Asia Economy Reporter Eunmo Koo] The number of mobile number portings to MVNOs (Mobile Virtual Network Operators) exceeded one million last year. This is attributed to the increasing demand to use new 5G smartphones such as the Galaxy Note20 and iPhone 12 with relatively affordable LTE plans, as the second year of commercialization saw successive releases of 5G smartphones.

According to the Ministry of Science and ICT on the 8th, the total number of MVNO number portings last year was 1,193,017, a 37.7% increase from 865,966 in 2019. While monthly MVNO number portings hovered around 90,000 in the first half of the year, the figure surpassed 100,000 in August. Subsequently, in November (114,974) and December (130,219), the number remained above 100,000 for two consecutive months, pushing the annual total beyond one million. The share of MVNOs in total number portings also exceeded 30%, reaching 31.2% in December last year.

This trend has continued into the new year. According to the Korea Telecommunications Operators Association (KTOA), the number of MVNO number portings in January increased by 17,425 (13.4%) from December to 147,644.

On the other hand, the three major telecom operators are experiencing a decline. Number portings to KT (82,098) and LG Uplus (85,550) fell below 100,000 for two consecutive months, decreasing by 15.6% and 25.1% respectively compared to the same period last year. SK Telecom recorded 112,629 portings, down 23.7% from 147,696 in the previous year.

The recent increase in MVNO number portings is interpreted as a result of growing demand since the second half of last year to use 5G smartphones with relatively inexpensive LTE plans. The spread of self-purchased unlocked phones, where consumers buy devices and activate them independently, has also influenced this trend. Unlocked phones do not require mandatory use of specific plans or additional services. Unlike carrier-sold models that require mandatory subscription to 5G plans, 5G smartphones can now be used with LTE plans, leading price-sensitive consumers to switch to affordable MVNO plans. MVNO plans use the networks of existing carriers, offering the same quality at much lower prices. Additionally, the three major carriers faced fines totaling around 50 billion KRW last year for illegal 5G subsidies, resulting in relatively passive marketing efforts, which positively affected MVNOs.

However, it is difficult to say that telecom operators have lost 5G subscriber demand to MVNOs. Although MVNO providers also offer 5G plans, the number of subscribers using them is extremely small. As of December last year, there were only 5,905 5G subscriptions within MVNOs. Considering that domestic 5G subscribers approached 12 million by the end of last year, this number is not significant.

There is also a point that number portings and subscriber growth should be examined separately. Since MVNOs allow free subscription and cancellation, there is a high demand for number portings between MVNO providers, so an increase in number portings does not necessarily mean that they have absorbed demand from telecom operators.

Ha Changjik, Secretary-General of the Korea MVNO Association, explained, "MVNOs have no contracts or penalties, making it easy to move between providers. Theoretically, 100 number portings can occur with just 10 subscribers, so this should be kept in mind." In January, 35.3% (52,167) of MVNO number portings were movements within MVNOs.

The industry expresses concern over the intensifying concentration within MVNOs toward subsidiaries of the three major telecom operators. The combined share of number porting subscribers in the MVNO market for subsidiaries of the three major carriers and KB Financial Group’s Livem reached 105,000 in January, accounting for 68.1% of the total.

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