Fourth Mobile Carrier or Altteul Phone?… Ministry of Science and ICT at a Crossroads to Break Telecom 3 Giants' Monopoly

The government is searching for a '4th mobile carrier,' but no company has actively stepped forward yet, making the selection process difficult. With plans to announce a 'Telecommunications Market Competition Promotion Plan' soon, there is speculation that the policy focus will shift toward expanding the competitiveness of MVNOs. A prominent proposal is to transform existing MVNO operators into Full MVNOs (Mobile Virtual Network Operators) equipped with their own IT infrastructure.

'Stalled' 4th Mobile Carrier Recruitment

On the 27th, the Ministry of Science and ICT announced that it plans to release the 'Telecommunications Market Competition Promotion Plan' by the end of this month or early next month to overcome the current monopolistic situation in the telecommunications market. The two main pillars of the competition promotion plan envisioned by the ministry are discovering a 4th mobile carrier and expanding the competitiveness of MVNOs.

Among these, the discovery of a 4th mobile carrier remains stalled despite the government's various efforts. Along with allocating one of the two 5G 28 GHz bands, which were canceled last December, to a new operator, the government has offered unprecedented conditions such as lowering the initial frequency allocation fees, increasing tax credit rates, and additionally supplying 5G 3.7 GHz band frequencies. However, no company has actively stepped forward yet.

The biggest challenge for the 4th mobile carrier's market entry is funding. Industry insiders estimate that approximately 300 billion KRW is needed to build around 300 key 28 GHz hotspots, which the government has set as a condition.

Even if the initial funding issue is resolved, further investment is necessary to survive the market share competition. The current three telecom companies already have strong brand images and wide service areas, resulting in high customer loyalty. The new 4th mobile carrier must provide aggressive marketing and innovative services to increase market share against these competitors, which requires additional capital and manpower.

In summary, only large corporations or financial institutions with abundant financial resources can realistically compete. However, although the government has contacted companies such as Shinsegae, KB Kookmin Bank, and Toss to recruit a 4th mobile carrier, these companies reportedly responded skeptically.

'Shift to Strengthening MVNO Competitiveness'

Given this situation, there is speculation that the policy focus of promoting competition in the telecommunications market will shift toward strengthening MVNO competitiveness. On the 20th, Park Yoon-kyu, the 2nd Vice Minister of the Ministry of Science and ICT, hinted at this shift by stating, "The activation of the MVNO market accounts for the largest portion of this telecommunications market competition promotion plan."

A leading proposal is to transform existing MVNO operators into Full MVNOs. A Full MVNO refers to an MVNO that has its own IT systems and infrastructure and independently designs and sells its pricing plans. This approach allows MVNO operators to compete with the three major carriers not only by relying on wholesale price reductions but also by investing in infrastructure.

Park Sang-ho, director of the Public Media Research Institute, said, "To compete with the three major carriers, it is not enough to just offer low prices," adding, "Full MVNOs can provide independent services, which could transform the small-scale MVNO industry that currently focuses on simple resale."

The Ministry of Science and ICT is also considering providing benefits that allow Full MVNO operators to lease telecom networks at lower costs. Generally, MVNO operators lease the entire network from the three major carriers under a full-network lease contract. Since Full MVNOs own part of the network, the ministry plans to exclude the cost of the network owned by the operator and allow them to lease the remaining network at a cheaper rate.

A ministry official said, "There have been many criticisms that MVNO operators have been passive in investing in infrastructure," adding, "We are considering ways to provide incentives to Full MVNOs to encourage active infrastructure investment."

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