"Cutthroat Competition vs No Problem" Controversy Over KB Livem Pricing Plan

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[Asia Economy Reporter Lim Hye-seon] The conflict between KB Live M and small and medium-sized MVNO operators is escalating. Small operators and mobile phone retailers claim that KB Live M, backed by the financial power of a financial company, is engaging in excessive business activities that disrupt the market and are demanding the cancellation of its service license. On the other hand, KB Live M stated that it has complied with the guidelines set by the Korea Communications Commission and that there are no legal issues.

Operating at a Loss, Threatening Survival Rights

On the 15th, the National Mobile Telecommunications Distribution Association pointed out that KB Live M’s continued excessive gift giveaways and dumping-level pricing threaten the survival rights of small merchants and small and medium-sized MVNO operators. According to the association, KB Live M sold the ‘Youth Hope LTE 11GB+’ plan (minimum 22,000 KRW per month) at a price lower than the wholesale cost (32,945 KRW) that must be paid to mobile carriers. It is analyzed that KB Live M is incurring an annual loss of about 260,000 KRW per subscriber to attract customers. MVNO operators borrow the network from carriers and pay a network usage fee (wholesale price) to the carriers, which is 50% of the carrier’s basic fee (65,890 KRW). The provision of excessive gifts is also claimed to be a case of inducing cutthroat competition. Last year, KB Live M partnered with Coupang to offer up to 220,000 KRW in gifts to customers purchasing the iPhone 13 and held events worth 400 million KRW, including giving away Galaxy Fit 2 devices. This year, during the launch of the Galaxy S22, prizes worth up to 100,000 KRW were also offered. A representative of a small and medium-sized MVNO operator said, "KB Live M is cleverly circumventing the Korea Communications Commission’s guidelines," and added, "We must prevent monopolies centered on large telecom companies and financial firms."

KB Live M: "No Legal Issues"

KB Live M maintains that there are no legal problems. It claims that its policy decisions are aimed at securing competitiveness within the bounds of the law. KB Live M stated that it consults with the Korea Communications Commission every time it conducts rate plan promotions and gift promotions. It also self-assessed that it has positively influenced expanding users’ choices by offering a variety of rate plans. The number of KB Live M subscribers has exceeded 250,000 in just over two years since its launch. According to a 2021 customer satisfaction survey released by the market research firm Consumer Insight, KB Live M ranked first in overall perceived satisfaction among domestic MVNOs.

Some suggest that the small and medium-sized MVNO operators’ targeting of KB Live M is a move to preemptively block the entry of new financial companies. The Financial Services Commission extended KB Kookmin Bank’s Live M business special period until April 16 next year and plans to revise financial-related laws to continue providing innovative financial services. Once the laws are revised, not only Kookmin Bank but also other commercial banks will be able to enter the MVNO business.

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