Expansion of Data Safety Options for MVNOs... Underperforming Operators to Be Removed

Ministry of Science and ICT Unveils Plans to Boost MVNO Market
Spectrum Fee Reduction Rate to Be Raised from 50% to 90%

Starting in August, users of budget mobile carriers will be able to continue accessing the internet even after exhausting their data, thanks to the expanded application of the data safety option (QoS) policy. Amid fierce competition in the budget carrier market, the government will standardize registration and operational requirements to ensure that only operators with minimum competency can compete. At the same time, it will implement a management and withdrawal system for underperforming companies that lack user protection capabilities.

On July 31, the Ministry of Science and ICT announced these measures, called the “Activation Plan for Budget Mobile Carriers,” at the Economic Ministers’ Meeting and the Special Task Force on Livelihood Price Control held at the Government Complex Seoul, with the aim of alleviating household communication cost burdens.

The domestic budget carrier market has long relied primarily on reselling mobile carrier plans without its own network infrastructure and focused on price competitiveness. As a result, 59 businesses have crowded into the market. Due to the lack of independent infrastructure, these companies faced limitations in designing and differentiating their own service plans, beyond just offering discounted prices. This has caused a drop in trust, with problems such as inadequate customer centers and vulnerability to voice phishing.

The Ministry of Science and ICT plans to collectively improve the rates, devices, and subscription procedures of budget carriers to ease communication cost burdens. First, QoS—previously applied by the three major mobile carriers—will be provided on a wholesale basis to budget carrier firms and introduced gradually starting in August.

For approximately 90 existing wholesale rate plans (RS), the safety option will be included at no additional cost, and, in particular, wholesale prices for 5G rate plans (the carriers' share) will be partially reduced. Additionally, with the cooperation of financial authorities, the rate of radio frequency usage fee reduction for small and medium-sized budget carriers will increase from 50% to 90%. Grounds will also be established to apply different reduction rates based on legal compliance and the level of user protection. The Ministry expects these measures to save the entire budget carrier industry about 25 billion won annually.

On the device side, the ministry will further promote certification for safe transactions with used phone dealers and establish a consultative body with related ministries, manufacturers, and distributors to expand the availability of mid-priced and unlocked devices. The government will also amend regulations to encourage the use of eSIMs, which can be activated immediately online. Furthermore, in collaboration with the Personal Information Protection Commission, it will expand MyData-based customized plan comparison and recommendation services to major budget carriers.

Additionally, after the transition to a self-negotiation system for wholesale pricing, the ministry plans to conduct a comprehensive assessment of market competition within this year, with the results to be linked to regulatory review and potential adjustments in the system.

Legal Definitions and Facility Requirements for Service-Type and Independent-Type Budget Mobile Carriers

The ministry is also taking steps to establish a foundation for the entry of new budget mobile carrier models. It will introduce institutional improvements, investment support, and the allowance of shared infrastructure (MVNE) as a package to enable the growth of service-type and independent-type carriers with their own infrastructure.

First, the ministry aims to create entry conditions for budget carrier models that rent basic networks from established carriers but can independently design a variety of rate and partnership services using their own infrastructure. To this end, it will establish legal definitions and facility requirements for service-type (partial MVNO) and independent-type (Full MVNO) budget mobile carriers, while expanding the obligation for network interoperability to all three major telecom companies. Pricing will be differentiated based on the level of owned infrastructure, and for independent-type budget carriers, wholesale pricing will be determined mainly via self-negotiation, with the government verifying appropriateness ex post if objections are raised.

To promote market entry by non-telecom companies in finance, distribution, and leisure sectors—and to ease cost burdens on small and medium-sized budget carrier firms—the government will permit and detail procedures for the resale of budget carrier infrastructure to other operators (MVNE). It will also pursue investment support linked to policy finance to relieve the burden of facility investment.

Unlike previous discussions, which only set a policy direction, this time the ministry will implement concrete, actionable ways to institutionalize these plans and will quickly begin revising enforcement ordinances and notifications next month to support actual market entry.

Stricter Customer Service Staffing Standards... On-site Inspections to be Conducted

User protection systems will also be strengthened. Registration and operation requirements will be standardized so that only operators with minimum competency can compete fairly. For underperforming operators that lack basic customer service and user protection capabilities, a management and withdrawal system will be implemented.

To address one of the main complaints—delays in reaching customer centers—the ministry will raise the standard for customer service staffing and conduct regular evaluations. It will also strengthen training for small and medium-sized operators and conduct a comprehensive market inspection. Guidelines for mergers and acquisitions will be updated to ensure smooth market restructuring without user inconvenience.

The Ministry of Science and ICT stated, "Through these measures, the number of budget carrier subscribers will continue to increase, and the number of service-type and independent-type operators with their own infrastructure will expand to more than three, fostering a sustainable ecosystem for budget carriers."

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