[Asia Economy Reporter Seulgina Jo] Amid growing concerns over the deterioration of competitiveness among small and medium-sized operators and the hindrance of fair competition following KT Skylife's entry into the budget phone market, the Ministry of Science and ICT, the main regulatory body, has imposed additional registration conditions on Skylife. KT, Skylife's parent company, also announced support measures for coexistence with small budget phone operators, including a reduction in 5G wholesale prices.
On the 29th, the Ministry of Science and ICT announced that after gathering expert opinions on Skylife, which applied for registration as a Mobile Virtual Network Operator (MVNO) in August, it imposed additional conditions to promote fair market competition alongside the existing registration conditions applied to budget phone subsidiaries of mobile carriers.
First, the Ministry stipulated that if Skylife offers bundled products including budget phones, it must provide the same offerings equally to other budget phone operators. As a result, all budget phone operators will be able to offer bundled products including satellite broadcasting.
Additionally, when Skylife resells mobile carriers' rate plans as-is, it must not launch products priced below the wholesale price, establishing safeguards against the possibility of unfair competition with small budget phone operators caused by excessive competition.
The parent company, KT, also decided to promote measures to revitalize the budget phone market and support coexistence with small budget phone operators.
Regarding 5G wholesale prices, KT will lower the wholesale prices of the two currently offered plans (8GB+1Mbps, 200GB+10Mbps) to match the price reduction level of the wholesale mandatory provider (SK Telecom), and plans to expand wholesale offerings for newly launched 5G plans in the future.
Furthermore, KT will provide its wired and wireless bundled products equally to budget phone operators and expand discounts for bulk data purchases. This is scheduled to be implemented in December. KT will also operate the ‘Budget Phone Partners Homepage’ and develop a self-activation system to support the business activities of small budget phone operators.
Earlier this year, KT incorporated a ban on unfair practices targeting budget phone operators into its internal policies to prevent recurrence of unfair acts during the process of acquiring budget phone subscribers from mobile carriers, and has been enforcing this since October.
The Ministry of Science and ICT stated, "While Skylife's entry into the budget phone market brings vitality to the overall market, concerns about hindrance to fair competition have arisen due to the market share expansion of budget phone subsidiaries of mobile carriers, so registration conditions were imposed on Skylife." It added, "We will continue to review various policy measures, including improving entry requirements for budget phones and the wholesale provision system, to alleviate market concerns about the market share expansion of budget phone subsidiaries of mobile carriers."
Meanwhile, Kim Hyung-jin, president of the Korea Budget Telecommunications Operators Association, urged the exit of mobile carriers' budget phone subsidiaries from the market during a welcoming speech at the opening ceremony of the Budget Phone Square near Seodaemun, Seoul, on the 27th. Kim stated, "The M&A and mergers of the three major carriers' wired and wireless businesses, as well as MSO acquisitions and mergers, are driving small and medium telecommunications and broadcasting operators to extinction," and argued, "The market share of budget phone subsidiaries of the three major carriers must be reduced and they should withdraw within three years." Present at the event were Deputy Minister Jang Seok-young of the Ministry of Science and ICT and others. As of 2019, the sales proportion of budget phone subsidiaries of mobile carriers accounted for 65% of budget phone sales.
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