'Self-Sufficiency + Altteul Phone' Sweet Combo Emerges... Altteul Phone Heats Up with iPhone 12 Launch

Apple's first 5G smartphone, the iPhone 12 series, was officially released in Korea on the 30th and is displayed at the Apple Store on Garosugil, Gangnam-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy reporters Seulgina Jo and Jinju Han] "I bought the iPhone 12. These days, 'Unlocked + MVNO' is definitely the trend."

Along with the launch of the new iPhone 12, the MVNO market is heating up. Centered on customers dissatisfied with expensive 5G plans, the 'sweet combination' of purchasing the iPhone 12 unlocked and subscribing to an MVNO SIM plan is gaining popularity. Major MVNO providers competing to attract iPhone 12 subscribers are not hesitating to offer unusual promotions such as loss and damage insurance support and prize giveaways. At the core of this trend are the MVNO subsidiaries of the three major telecom companies with strong capital. With the subscriber share of these subsidiaries already approaching 40%, it is expected that competition led by the three major telecom companies in the MVNO market will become increasingly fierce.

Unlocked Phone Boom Boosts MVNO Market... iPhone 12 Launch Plays a Role

According to industry sources on the 2nd, the number of MVNO subscribers reached 7,365,881 at the end of September, an increase of 12,148 from the previous month. This marks two consecutive months of growth. In the same month, the net increase in subscribers switching from the three major telecom companies?SK Telecom, KT, and LG Uplus?to MVNOs was 12,433, the highest this year. The MVNO market, which had been weakened by aggressive 5G marketing from the three major telecom companies last year, has shown a clear rebound in recent months.

This is closely related to the unlocked phone trend that has spread this year. One out of every ten smartphone users in Korea is confirmed to purchase devices directly through online channels and activate them unlocked. Dissatisfaction with expensive 5G plans and quality has also prompted smartphone users to turn to MVNOs. On major sites like Clien and Ppomppu, posts such as "Subscribing to an MVNO LTE plan with a 5G smartphone is a sweet combo," "Unlocked + MVNO is definitely the trend these days," and "MVNOs are getting cheaper and cheaper. It's a great deal" are posted several times a day. Especially after the iPhone 12 launch, such posts have noticeably increased.

Operators have also launched aggressive marketing campaigns. Following the release of Apple's 5G smartphone iPhone 12, which was highly anticipated in the second half of the year, major MVNO providers have been targeting customers who purchase the iPhone 12 and iPhone 12 Pro unlocked to attract SIM plan subscribers. They are conducting extensive plan promotions as well as offering loss and damage insurance, iPhone-specific insurance products, and prize events. An industry insider said, "It is unusual for the MVNO industry, not the three major telecom companies, to launch events aligned with the new iPhone release," adding, "With the activation of unlocked purchases this year, marketing targeting iPhone 12 unlocked customers has begun."

However, this is mainly led by subsidiaries of the three major telecom companies such as U+ Alttel Mobile, KT M Mobile, SK Telink, and large companies like KB Kookmin Bank's Liv M. Smaller MVNO operators with relatively limited capital and brand recognition have been pushed to the sidelines. Another industry insider said, "The recent revitalization of MVNOs is led by the subsidiaries of the three major telecom companies, making it increasingly difficult for small operators to survive in the competition."

KT Skylife Joins MVNO Market... Structure Centered on Three Major Telecom Subsidiaries

The MVNO market structure, which is being reorganized around the subsidiaries of the three major telecom companies, is expected to deepen further. Contrary to the government's original intention to shake up the entrenched competition among the three major telecom companies by introducing MVNOs, the MVNO market itself seems to be falling under the influence of the three major telecom companies.

Currently, 14 operators, including subsidiaries of telecom companies, are active in the MVNO market. Although the subscriber ratio of telecom subsidiaries such as LG HelloVision, MediaLog, KT M Mobile, and SK Telink is only 37%, they account for 65% of total sales. KB Kookmin Bank's Liv M is also competing with telecom subsidiaries by attracting 83,000 subscribers.

Recently, KT Skylife has also entered the MVNO market. With KT Skylife joining KT M Mobile, the leading MVNO operator, KT's market share is expected to increase.

As the market share of the three major telecom subsidiaries in the MVNO market rises, there have been calls to change the registration conditions. Currently, the Ministry of Science and ICT limits the combined number of subsidiary subscribers to within 50% of the total MVNO subscribers. Assemblyman Jo Myeong-hee of the People Power Party pointed out during a recent audit that this should be changed to "50% of subscribers using the telecom companies' networks." Currently, the network share of telecom MVNOs is approximately 50% for LG Uplus, 30% for KT, and 20% for SK Telecom.