"13 Years Since Introduction... Need to Assess the Ecosystem"
[Asia Economy Reporter Oh Su-yeon] The recent rapid growth of the budget phone market is attributed to the surge in Internet of Things (IoT) lines.
On the 29th, the office of Assemblyman Park Wan-joo revealed, based on data submitted by the Ministry of Science and ICT, that the main reason for the sharp increase in budget phone subscribers was a 518% rise in IoT lines from 2019 to 2022. In contrast, the number of mobile phone line subscribers increased by only 5% during the same period.
In 2022, the number of budget phone mobile line subscribers of subsidiaries of the three major mobile carriers increased by 54% compared to 2019, and the number of subscribers from large corporations and big tech groups rose by 162%, influenced by Kookmin Bank's budget phone business. Meanwhile, the number of mobile phone line subscribers of small and medium-sized operators, including the post office operator, decreased by about 30% during the same period.
Excluding IoT lines from the total budget phone subscribers, the market share of subsidiaries of the three major carriers increased by about 16%, from 35% in 2019 to 51% in 2022. The influence of the three major carriers is significant even in the budget phone market.
However, the sales revenue of small and medium-sized operators, including the post office operator, increased by 23% to approximately 385 billion KRW in 2021 compared to 2019. During the same period, the sales growth rate of subsidiaries of the three major carriers was 19%. This is why some argue that small operators should also have their minimum obligations for facility investment and user protection and convenience legislated.
In fact, complaints related to budget phones received by the Anti-Corruption and Civil Rights Commission increased by 181%, from 611 cases in 2018 to 1,714 cases in 2021. Last year, 1,114 cases were reported.
Assemblyman Park stated, “Although it has been 13 years since the introduction of the budget phone system, the Ministry of Science and ICT has not taken steps to organize issues such as wholesale provision obligations, pricing methods, and consumer protection measures, which is intensifying market instability due to regulatory gaps. Especially since financial conglomerates like Kookmin Bank, Toss, and Shinhan Bank have already entered or plan to enter the budget phone market, it is necessary to review the entire budget phone ecosystem.”
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