"Budget Phone Market, Subsidiaries of the Three Major Telecom Companies Hold Over 50% Market Share"

National Assembly Science and ICT Committee Member Yang Jeong-suk Points Out
"Statistics Distorted Due to Inclusion of IoT Lines"

Member of the National Assembly Science, Technology, Information and Broadcasting Communications Committee Yang Jeong-suk

[Asia Economy Reporter Minyoung Cha] It has been pointed out that the market share of subsidiaries of the three major telecommunications companies exceeds 50% in the budget phone (MVNO) market when excluding Internet of Things (IoT) lines. There is a claim that the method of calculating market share should be improved to correct statistical distortions.

According to data submitted by the Ministry of Science and ICT to Rep. Jeongsuk Yang of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee on the 24th, as of the end of February, the number of mobile phone line subscribers of telecommunications subsidiaries accounted for 3.21 million out of a total of 6.31 million, or 50.9%.

However, when calculated according to the Ministry of Science and ICT's method, which includes IoT lines, the market share of subsidiaries of the three major telecommunications companies drops to 31.8%. The market share of mobile phone line subscribers of the three major telecommunications subsidiaries increased from 37.1% in 2019 to 42.4% in 2020, a 5.6 percentage point increase. In 2021, the market share continued to rise to 50.8%, an 8.4 percentage point increase from the previous year.

Including IoT lines, the market share was 36.1% at the end of 2019 but fell by 4.7 percentage points to 31.4% at the end of 2020. Then, it slightly increased to 31.9% in 2021 and 31.8% in February this year, showing a decrease in market share. This is a distortion phenomenon caused by an overall decrease in mobile phone subscribers while IoT subscribers are increasing.

In 2019, the number of budget phone mobile subscribers was 6.87 million, which decreased by 11.3% to 6.09 million in 2021. On the other hand, during the same period, IoT subscribers surged by 384.8%, from 870,000 to 4.26 million. In February this year, it further increased to 4.48 million.

Among them, the number of IoT subscribers of subsidiaries of the three major telecommunications companies decreased by 40,000, from 250,000 at the end of 2019 to 210,000 in February this year. During this period, IoT subscribers of small and independent budget phone operators increased 6.8 times, from 620,000 to 4.27 million. Considering this, 95.2% of budget phone IoT subscribers are concentrated in small operators.

The increase in IoT lines is influenced by vehicle IoT. Most new vehicles released domestically are equipped with lines, leading to rapid growth. In fact, as of the end of February, the number of IoT line subscribers of Hyundai Motor, a budget phone operator, is about 2.1 million. Kia Motors has 720,000, Mercedes-Benz Korea 320,000, Renault Samsung 40,000, Tesla 30,000, SsangYong Motor 20,000, and combined, it is estimated to exceed 3.24 million. Due to this influence, the distortion in budget phone market share statistics is expected to deepen.

Rep. Yang said, "The current market share limit for subsidiaries of the three major telecommunications companies in the budget phone market has become ineffective due to the increase in IoT line subscribers," adding, "While the Ministry of Science and ICT has been listening to the opinions of the three major telecommunications companies since last year to improve the calculation method, the number of mobile phone line subscribers has exceeded half." She urged, "The current market share calculation method must be improved immediately."

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