KCC Resolution on Enforcement Decree Amendment of the Mobile Device Distribution Act
Up to 500,000 KRW Support for Mobile Number Portability
Daily Disclosure of Subsidies Allowed... Effective from the 14th
When changing mobile phone carriers, customers can now receive not only the official subsidy and additional subsidy but also a separate switching subsidy of up to 500,000 KRW.
On the 7th, when the government approved a partial amendment to the Enforcement Decree of the Act on the Improvement of Distribution Structure of Mobile Communication Terminals (Terminal Distribution Act) at the Cabinet meeting, a banner related to mobile phone discounts was hung at a mobile phone store in Seoul. Photo by Jinhyung Kang aymsdream@
On the 13th, the Korea Communications Commission (KCC) approved the "Standards for Payment of Switching Subsidies upon Mobile Carrier Number Portability" and the "Detailed Standards for Disclosure and Posting of Subsidies," following the revision of the Enforcement Decree of the Act on the Improvement of Distribution Structure of Mobile Communication Terminals (the Terminal Distribution Act).
This decision was made to create conditions that can activate marketing competition among carriers before the abolition of the Terminal Distribution Act, and it is a follow-up measure after the amendment of the Enforcement Decree of the Terminal Distribution Act on the 8th.
Through this notification enactment and revision, the KCC established detailed payment standards for switching subsidies. The switching subsidy is an amount that mobile carriers provide to support the cost burden of users who port their numbers. The KCC allowed carriers to pay switching subsidies up to 500,000 KRW, considering expected profits, penalty fees, SIM card issuance costs, and loss of long-term subscription benefits.
Additionally, the subsidy disclosure cycle by mobile carriers has been changed from twice a week (Tuesday and Friday) to daily updates. This aims to strengthen the carriers' marketing autonomy.
The notification enactment and revision approved this time will take effect immediately from the 14th, when it is published in the official gazette.
The KCC plans to form and operate a market situation monitoring team together with the three major mobile carriers and the Korea Information Society Development Institute to monitor the market and take measures to prevent confusion arising from the payment of switching subsidies after the system is implemented.
Regarding opinions submitted by the MVNO Association and others during the administrative notice period for the notification enactment and revision, the KCC plans to communicate closely with the Ministry of Science and ICT and the associations. The association submitted an objection letter on the 8th against the draft notification on the "Standards for Payment of Mobile Switching Subsidies," stating that "the oligopoly structure of the three major carriers will be strengthened, putting the MVNO business at risk of collapse."
KCC Chairman Kim Hong-il stated, "Through the notification enactment and revision, we expect to activate autonomous subsidy competition among telecom operators, thereby substantially reducing the burden of device purchases for the public." He added, "We will also work to prepare and implement measures to protect MVNO operators in consultation with the Ministry of Science and ICT."
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