As part of the government's plan to activate budget mobile phones, it has been identified that the effect of attracting subscribers to the budget mobile phone plan launched by budget mobile companies, which offers '20 gigabytes (GB) of 5G (fifth-generation mobile communication) for 10,000 won,' is minimal. Analysts suggest that the budget mobile phone plan priced at 10,000 won does not support QoS (Quality of Service, providing data services at speeds of 1 to 5 Mbps after basic data depletion), leading to a decrease in effectiveness in attracting subscribers.
According to the industry on the 18th, it has been confirmed that the number of subscriptions to budget mobile phone plans priced at 10,000 won, launched by budget mobile companies under government leadership since February, is only about 3,000. The companies that launched the budget mobile phone plan priced at 10,000 won are limited to four: Smatel, Kunsaram Connect, Freetelecom, and EYESVISION. None of the nine budget mobile phone plans launched by these four companies supports QoS.
According to the statistics on wireless communication services announced by the Ministry of Science and ICT this month, the number of budget mobile phone subscriptions (based on mobile subscriptions) was about 9.64 million in February, an increase of about 150,000 compared to December of last year, which had approximately 9.49 million. A representative from the budget mobile phone industry stated, "It is difficult to view the total of about 3,000 subscriptions to the budget mobile phone plan launched under government leadership as the direct cause of the increase in budget mobile phone subscriptions in February."
The budget mobile phone plan priced at 10,000 won is a policy devised by the Ministry of Science and ICT to activate budget mobile phones, reduce household communication costs, and promote new competition in an oligopolized telecommunications market. The Ministry has drastically reduced the wholesale prices for data by up to 52% through negotiations with telecommunications companies. However, this reduction is limited to the volume-based (RM) wholesale prices for network usage and does not apply to the flat-rate (RS) wholesale prices for network usage, which over 90% of budget mobile phone subscribers use.
The biggest difference between flat-rate and volume-based network usage is whether or not QoS is supported. The flat-rate system supports the same QoS as telecommunications companies because budget mobile companies resell plan products with the same configuration as telecommunications companies at a lower price. Users can utilize unlimited data for free even after consuming basic data. On the other hand, the budget mobile phone plan priced at 10,000 won, launched under government leadership, uses a volume-based method, so it does not support QoS. Once the allocated 20GB of data is exhausted, an additional charge of 22.53 won per megabyte (MB) will be incurred.
A representative from a budget mobile company noted, "If you use the 10,000 won plan and require additional data, you might face a bill shock, which is why existing budget mobile subscribers are not switching to the 10,000 won plan."
Although the Telecommunications Business Act stipulates that market-dominating companies (SK Telecom) must provide calls, data, and text messages, there are no regulations regarding QoS. Therefore, the government cannot compel telecommunications companies to provide QoS to budget mobile companies free of charge. From the telecommunications companies' perspective, having already lowered the volume-based wholesale prices for budget mobile phones by about 50%, they are understandably reluctant to provide QoS for free, as it could lead to subscriber losses to budget mobile plans.
Of course, QoS that can be used at a speed of 400 Kbps is additionally supported for existing volume-based budget mobile phone plans, but it has not been utilized properly as it is at a level where basic web browsing is difficult.
The Ministry of Science and ICT stated that it would negotiate with SK Telecom to increase QoS to a speed of 1 Mbps, but this would inevitably incur additional charges. If additional charges are implemented, it has been pointed out that the budget mobile phone plans priced at 10,000 won would realistically rise to the price range of 20,000 to 30,000 won. Currently, budget mobile company Smatel has priced its 20GB 5G plan at 19,800 won per month.
Jeong Jeong-sang, an adjunct professor at Chung-Ang University Graduate School of Communication, stated, "If you use a telecommunications company's plan priced at 30,000 won, you can use unlimited data at a speed of 3 Mbps even after consuming all the data, and calls are also unlimited. You can also benefit from various partnership discounts and family bundling promotions. However, the 10,000 won budget mobile phone plan is questioned as to whether people would want to use it, given that even if QoS is provided, the speed is only 1 Mbps, and it would become similarly priced to telecommunications company plans."