Will 'Altteul Phone and Frequency Allocation' Both Be Passed to the Next Administration?

Two Major Issues of Telecom Operators Unresolved
Opinions Divided in Altteul Phone Industry
Ultimately No Conclusion by March
Frequency Allocation Decision Under Review

[Asia Economy Reporter Lim Hye-seon] The two major issues sharply contested by the three major mobile carriers?‘Improvement of the MVNO system’ and ‘Additional frequency allocation’?are expected to be passed on to the next administration. There are criticisms that the problems, which have been pointed out since the early days of the system’s introduction, were not resolved through policy and were postponed repeatedly, ultimately leaving the decision to the next government.

"No Conclusion on MVNO by March"

On the 28th, a senior official from the Ministry of Science and ICT stated, "We intended to present improvement measures for the MVNO system by March, but since opinions within the telecommunications industry vary, it will take more time." With the MVNO issue also being passed on to the next government, both major issues?the MVNO and 5G frequency problems?that the three major carriers have fiercely debated over the past year will be handed over to the next administration. Initially, the Ministry of Science and ICT planned to conclude the additional 5G frequency allocation issue by February at the latest, and the MVNO issue by March.

The MVNO service was introduced in September 2010 to activate competition in the telecommunications industry and reduce communication fees. The number of subscribers, which surpassed 1 million in 2012, has exceeded 10 million in 10 years. Meanwhile, the market share of subsidiaries of the three major carriers has also soared. According to data submitted by the Ministry of Science and ICT to Rep. Yang Jeong-sook of the National Assembly’s Science, Technology, Information and Broadcasting Committee, as of last October, the combined market share of the three major carriers’ MVNO subsidiaries was 32%.

Excluding IoT (Internet of Things) lines and considering only mobile phones, the market share is about 49.9%. Considering recent market growth trends, some estimates suggest that the market share has already exceeded 50%. There have been ongoing criticisms that the entry of the three major carriers’ subsidiaries into the MVNO market early on would deepen the oligopoly situation, and this is regarded as a representative failure of the Ministry of Science and ICT, which has overlooked this while leading policy.

As criticism arose that the three major carriers, as large corporations, were ‘dividing the market’ through their subsidiaries in the MVNO market, thereby undermining the original purpose of the system’s introduction, Minister Lim Hye-sook of the Ministry of Science and ICT officially promised several times last year to establish a system that would enable small and medium-sized businesses to gain competitiveness.

However, as controversy intensified between the ‘large corporation regulation theory’ for revitalizing a fair economy and the ‘competition activation theory’ for consumer welfare, the Ministry of Science and ICT has only been reviewing the issue for five months without reaching a conclusion.

Frequency Re-examination Underway

The decision on additional 5G frequency allocation has entered a re-examination phase. A Ministry of Science and ICT official said, "We have kicked off a research team related to additional 5G frequency allocation."

The Ministry has also started a frequency demand survey targeting the three major carriers for bands above 3.7 GHz. Typically, based on the carriers’ demand, a research team operates and then decides the allocation band. Afterward, an auction schedule is set, and an auction notice must be issued one month before the auction. The industry views that the decision-making authority has already passed to the next government.

Previously, the government accepted LG Uplus’s request to additionally allocate the 3.4?3.42 GHz band to provide non-discriminatory services across regions in the 5G joint network built by the three major carriers in rural areas.

However, SK Telecom argued that to ensure benefits for all citizens, all three carriers should equally secure frequencies, demanding an additional 40 MHz allocation in the band above 3.7 GHz. The Minister of Science and ICT also stepped in to mediate the carriers’ ‘turf war’ but failed.

An industry insider said, "It seems that the inertia of government ministries at the end of the administration is repeating ahead of the presidential election," adding, "When the government changes, a new framework must be established, and issues such as MVNO regulation and frequency allocation are expected to be re-discussed from scratch."

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