Expansion of Budget Phone Providers and Mandatory Resale of Telecom Networks... "Breaking Telecom and Finance Oligopolies"

Kang Ki-jung, Chairman of the Fair Trade Commission [Photo by Yonhap News]

[Asia Economy Reporter Ryu Tae-min] On the 23rd, the Fair Trade Commission (FTC) announced that it will strictly respond to acts by businesses in the financial and telecommunications sectors that restrict competition and infringe on consumer rights.

That afternoon, Han Ki-jung, Chairman of the Fair Trade Commission, reported these measures to President Yoon Seok-yeol to promote competition in the financial and telecommunications sectors. The FTC stated, "The financial and telecommunications industries have a monopolistic market structure dominated by a few businesses due to entry restrictions caused by government regulations," and added, "We plan to actively promote regulatory improvements to revitalize competition in the financial and telecommunications sectors and strictly respond to acts that restrict competition and infringe on consumer rights."

The FTC further noted, "As market concentration increases and it becomes difficult for potential competitors to enter, the likelihood of rent-seeking behavior by businesses also rises."

The commission intends to pursue institutional improvements to promote competition, focusing on sectors where monopolies and oligopolies have persisted for a long time. Regarding the telecommunications market, it plans to conduct market analysis to promote price competition in the mobile device distribution market through consultations with the Korea Communications Commission and prepare improvement measures for related systems such as the Mobile Device Distribution Act.

Additionally, the FTC decided to encourage new entrants into the market so that MVNO (Mobile Virtual Network Operator) businesses can check the oligopoly of the three major mobile carriers. As of 2021, the subscriber share of MVNO mobile phone lines is 50.8% for subsidiaries of the three major carriers and 49.2% for independent and small businesses.

The extension of the wholesale provision obligation of the telecommunications network by the incumbent telecommunications operator (SKT) will also be reviewed. Currently, MVNOs operate by purchasing services and facilities wholesale from mobile carriers and reselling them. Mobile carriers designated as incumbent telecommunications operators are obligated to provide their networks upon wholesale requests from MVNO businesses. However, opinions differ within the industry regarding whether to extend this obligation.

The FTC also plans to promptly investigate whether the three major mobile carriers exaggerated the speed of their 5th generation mobile communication (5G) services in advertisements.

The FTC will review the terms and conditions used by banks, mutual savings banks, financial investment firms, and specialized credit finance companies. For contract clauses that disadvantage consumers, it will request corrective actions from the Financial Services Commission and the Financial Supervisory Service.

President Yoon urged, "Please firmly devise measures to suppress rent-seeking behavior in the oligopolistic system that causes excessive burdens on the people."

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