Budget Phone Customers Plummet... Could 5G Adoption Be an Opportunity?

[Asia Economy Reporter Seulgina Jo] With the commercialization of 5G intensifying marketing competition among the three major mobile carriers, nearly 300,000 customers porting their numbers to MVNOs decreased last year alone.

According to the Korea Telecommunications Operators Association (KTOA) on the 27th, from January to December last year, the number of customers who ported their numbers from MVNOs to the three major carriers reached 705,090, an increase of more than 10,000 compared to the previous year (692,352). On the other hand, customers who moved from the three major carriers to MVNOs numbered 428,561, a decrease of over 100,000 compared to 2018 (564,501).

As a result, the total net number of users porting to MVNOs decreased by 276,529. The total number of MVNO subscriptions also declined by 160,000, from 8,032,267 in January last year to 7,869,230 as of the end of November last year.

This is interpreted as the aftermath of the three major carriers' tariff restructuring in 2018, the commercialization of 5G in April last year, and the marketing competition among the three carriers. At that time, carriers competing for 5G customers engaged in battles over official subsidies and illegal rebates, leaving MVNOs marginalized.

KB Kookmin Bank, which entered the MVNO market at the end of last year, achieved the milestone of attracting over 10,000 new number porting subscribers by mid-this month; however, half of these are identified as users switching from other MVNOs.

Nonetheless, with the full-scale introduction of 5G to MVNOs this year, there is analysis that this will become a positive factor for the industry going forward.