Bill Proposed to Maintain Wholesale Mandatory Provision System with Annual 1.4 Trillion KRW Savings on Budget Phone Communication Fees

Democratic Party Rep. Kim Young-joo Leads Bill to "Sustain Support for Altteul Phone Market"

[Asia Economy Reporter Lim Hye-seon] Kim Young-joo, member of the National Assembly Science, Technology, Information and Broadcasting Communications Committee and Deputy Speaker of the National Assembly from the Democratic Party of Korea, has taken the lead in proposing a revision to the Telecommunications Business Act that removes the sunset clause on the mandatory wholesale provision system for budget phones.

Kim explained that budget phones, implemented since 2010 to reduce household communication expenses, provide services at about 30% to 50% of the rates of major telecom companies, resulting in an annual reduction of approximately 1.4 trillion KRW and a total reduction of 15.6 trillion KRW over the past decade.

Budget phones operate by purchasing services and infrastructure wholesale from mobile carriers and reselling them. To ensure stable business operations for budget phone providers, the government requires that if a budget phone operator requests it, the designated period telecommunications operator (SK Telecom) must provide network access unless there are special reasons not to.

However, the mandatory wholesale provision system for budget phones, which was subject to a sunset clause stipulated in the supplementary provisions of the Telecommunications Business Act, expired on the 23rd of this month. Budget phone operators have demanded the abolition of the sunset system because the mandatory wholesale provision system has expired every three years, making long-term investment and business planning difficult.

Although bills to extend the mandatory wholesale provision period for budget phones are pending in the National Assembly, even if passed during this regular session, the effect would only take place six months later due to the supplementary provisions, potentially causing a gap. Therefore, Kim Young-joo’s bill seeks to remove the sunset clause in the supplementary provisions to immediately resolve the gap in the mandatory wholesale provision system upon enactment.

Kim Young-joo stated, "Budget phones have proven to reduce household communication expenses by 1.4 trillion KRW annually," adding, "In this era of high inflation, continuous support for the budget phone market is necessary to ensure a stable ecosystem and protect consumer interests."

He continued, "If the mandatory wholesale provision system disappears, small and medium budget phone operators could face existential threats, potentially making it impossible to maintain the budget phone ecosystem," and pledged, "I will do my best to ensure the law passes in this regular session so that the mandatory wholesale provision system can continue."