[The Editors' Verdict] The Reverse Surge of MVNOs

The ‘reverse surge’ of a girl group has become a hot topic. Their song, which traveled through military bases from Baengnyeongdo to the southernmost tip of the Korean Peninsula during their unknown days, has gone viral and swept the music charts after four years. This movement of consumers discovering ‘hidden gems’ is not limited to the music industry. Beyond food and home appliances, recently, a similar reverse surge has been observed in the solid mobile telecommunications market dominated by the three major carriers, drawing attention. The protagonist is the 10-year-old ‘Altteul Phone’ (MVNO). Once regarded as a 5060 generation’s filial piety phone and overlooked by the public, the Altteul Phone has surpassed the major carriers in consumer recommendation intentions and is now racing toward 10 million subscribers, unfolding a dramatic comeback.

Recent reverse surge cases clearly prove that ‘good content is eventually chosen.’ The secret behind Altteul Phone’s comeback lies in its solid consumer benefits. Debuting without a single proper advertisement and earning consumer choice, Altteul Phone has continuously made painstaking efforts to reduce unnecessary marketing costs and distribution margins, returning those savings to customer benefits. With groundbreaking plans such as ‘half-price LTE USIM’ and ‘10,000 KRW-level 5G USIM,’ it has drastically lowered household communication expenses. Moreover, Altteul Phone was the first to innovate the consumer’s non-face-to-face experience in the COVID-19 era. Consumers can now easily purchase USIM cards from online direct shops or convenience stores near their homes instead of visiting dealerships and self-activate within five minutes. Recently, a ‘convenience store USIM delivery service’ within 30 minutes has also been introduced.

The reason why Altteul Phone’s advancement is even more anticipated is the emergence of ‘predators’ combining telecommunications services with their core businesses. Following KB Kookmin Bank, various companies including Kakao and Hyundai·Kia Motors have recently entered the Altteul Phone operator (MVNO) market, creating new added value. The fusion of lifestyle services and telecommunications across finance, IT platforms, and automobiles is expected to enrich consumers’ lives significantly. The Altteul Phone market has now begun evolving beyond simple resale of mobile telecommunications and infrastructure investment-based independent tariff services into a third-generation market. This change is highly suggestive, considering that advanced Altteul Phone markets overseas, such as in Europe and Japan, have grown by securing ecosystem diversity through active MVNO entry by non-telecom companies.

The current spotlight on the Altteul Phone market is especially important because it represents a golden time for Altteul Phone operators to form differentiated markets. To this end, the role of Altteul Phone must be discussed, and future development directions for the Altteul Phone market must be established. With the active emergence of new operators, it is now time for a three-dimensional growth policy that supports small, medium, large, and non-telecom operators to expand consumer choice and grow the market pie through their distinct roles. For example, large operators such as mobile carrier subsidiaries can lead industry development by investing in innovative services and increasing negotiation power with mobile network operators (MNOs), while small and medium operators can grow by targeting low-cost and niche markets through mutual cooperation. Non-telecom operators should pioneer unprecedented third markets through cross-industry convergence and new data businesses based on the Internet of Things (IoT).

The real challenge for Altteul Phone, which has reached its late blooming prime after 10 years since debut, has just begun. If the past decade was a struggle to reduce household communication expenses, now is the time to innovate consumers’ mobile lives with differentiated services. We cheer for the strong forward drive opening the second act of the Altteul Phone growth story.

Shin Minsu, Professor, Department of Business Administration, Hanyang University