Rep. Yoon Young-chan Introduces Amendment to the Telecommunications Business Act
Wholesale Provision Obligation Extended Once to Mitigate Market Shock
Safety Measures Established to Address Concerns Over Price Increases
[Asia Economy Reporter Lim Hye-seon] Legislation is being promoted to secure the competitiveness and differentiation of MVNO operators and to support the market's independence and sustainable growth.
On the 18th, Representative Yoon Young-chan, a member of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee, introduced the "Partial Amendment to the Telecommunications Business Act." This is a phased deregulation plan that abolishes wholesale price regulation and entrusts the market with autonomy to guarantee the autonomy of the MVNO market, while extending the wholesale provision obligation once more to mitigate the shock to the market.
The wholesale provision obligation system was implemented in 2010 as a support measure for MVNOs to restructure the mobile communication market and reduce household communication expenses. It has been maintained for more than 10 years through three extensions. Since the system's implementation, the MVNO market has steadily grown. The number of subscribers surpassed 10 million in 2021 and exceeded 12.63 million as of November last year. MVNOs account for 16.4% of the entire mobile communication market and have entered a stable growth phase. MVNOs are evaluated to have contributed to reducing national household communication expenses based on their cheaper rate plans compared to mobile carriers.
However, there are also consumer complaints about MVNO operators, who relatively lack customer service and their own facilities. In fact, among MVNO operators, only one company owns its own facilities, and customer center services for user protection and convenience are also not smooth.
Accordingly, the amendment includes abolishing the government's direct intervention in the market through the wholesale provision obligation and wholesale price regulation, entrusting the market with autonomy, but includes "one additional extension (3 years) of the wholesale provision obligation" to mitigate the expected market shock due to the abolition of the system.
To alleviate industry concerns that prices might excessively increase due to the abolition of price regulation, a separate safeguard called the "corrective order authority" has been established. This system allows the government to conduct a post-review process on agreements with wholesale provision obligation operators and reject reports if price increases or discriminatory conditions are included.
Representative Yoon Young-chan emphasized, "To guarantee consumers' right to choose and for the MVNO industry to continue growing, it must secure its own competitiveness and differentiation in a market autonomous environment rather than relying on artificial government support." He added, "As the number of rational consumers increases and the MVNO industry steadily grows to enter a stable phase, the industry should now promote facility investments appropriate to its scale to provide high-quality services to consumers." He continued, "The government should also consider policy improvements for the healthy growth of the industry instead of continuing habitual support," and said, "This amendment will be an opportunity for the MVNO market to grow."
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