Korea Mobile Distribution Association,
"Unfair Competition Practices Continue Despite National Assembly Audit Criticism on Below Wholesale Price Discounts and Excessive Gifts"
[Asia Economy Reporter Cha Min-young] The Korea Mobile Distribution Association (KMDA), which consists of mobile phone agency and retailer owners nationwide, urged KB Kookmin Bank, the operator of the MVNO brand 'KB Live M,' on the 14th to "stop unfair competitive practices such as offering discounts below wholesale prices and excessive promotional gifts." They also demanded KB Live M's withdrawal in line with the end of the financial regulatory sandbox next year.
The Mobile Distribution Association announced on the 14th that it delivered a letter of protest containing these demands to KB Financial Group. If the demands are rejected, they plan to continue with actions such as a boycott of KB Financial Group transactions, protest visits to KB headquarters, and one-person demonstrations.
In recent years, the position of mobile communication stores has significantly narrowed. This is due to the full-scale shift to non-face-to-face interactions across society caused by COVID-19, as well as the increase in sales of unlocked devices and SIM cards through online channels and large retail stores.
In the letter, the association stated, "MVNO operators, especially KB Kookmin Bank, are continuously offering customers massive discounts on fees that mobile communication stores cannot possibly match, along with extraordinary promotional gifts, thereby poaching subscribers that small and medium-sized agencies have struggled to recruit."
According to the association, KB Kookmin Bank currently offers an unlimited voice and data plan, which has a wholesale price of 33,000 KRW, at a minimum of 22,000 KRW for 24 months. Meanwhile, small and medium-sized agencies sell similar plans at 49,000 KRW, making competition virtually impossible.
The association criticized, "During the National Assembly audit of the Korea Communications Commission last October, Representative Byun Jae-il pointed out that KB Kookmin Bank’s linked sales, which provide benefits worth up to 220,000 KRW when customers purchase an unlocked iPhone 13 from Coupang and subscribe to KB Live M MVNO, violated the KCC guidelines. Chairman Han Sang-hyuk of the KCC also pledged to thoroughly investigate KB Kookmin Bank’s guideline violations, but KB Live M has continued sales practices that disrupt the telecommunications market." They explained that small and medium-sized distributors are competing on a 'tilted playing field.'
The association added, "KB Live M, with its powerful capital, is disturbing the mobile communication market and becoming a predator in the telecommunications ecosystem that kills small and medium-sized distributors. Such actions are also inconsistent with the fairness emphasized by the new government."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
