Yang Hwan-jung, 59, former head of the Information and Communications Policy Office at the Ministry of Science and ICT (now president of ICT Polytech University), will take office as the full-time vice president of the Korea MVNO Association (hereinafter MVNO Association) in Feb. This is the first time since the MVNO Association was launched in 2013 that a former bureaucrat has joined as a full-time vice president. As MVNOs face expense pressure from regulatory changes and intensifying market competition, the move is seen as an effort to bolster a "government negotiation channel."
According to a compilation of ChosunBiz reporting on the 22nd, the MVNO Association recently finalized the appointment of Yang, the former Deputy Minister, as full-time vice president and is proceeding with the inauguration process. The association is said to be strengthening communication with the government and seeking a louder voice in discussions on various regulations and institutional reforms by recruiting an official who oversaw telecommunications policy at the Ministry of Science and ICT, the competent ministry. Yang graduated from the law department at Seoul National University and passed the 33rd higher civil service exam.
MVNOs have recently seen a growing burden of fixed costs. Since last year, spectrum usage fees have been imposed on MVNOs, and expense to comply with security regulations, such as the mandatory Information Security Management System (ISMS), has also increased. Smaller operators say the burden of personnel and budgets needed to obtain and maintain certification and build internal controls is growing.
The switch from ex-ante to ex-post regulation for calculating wholesale network access charges is another variable. Since Apr. last year, the party negotiating wholesale network access charges with the three mobile carriers changed from the government to individual MVNOs, and there is no shortage of claims that operators with weak bargaining power have been put at a disadvantage. The industry sees it as becoming harder to maintain MVNOs' strength in price competitiveness.
Repeal of the Mobile Device Distribution Improvement Act is also cited as a burden for MVNOs. There are concerns that if the three mobile carriers, which have ample capacity to offer subsidies, ramp up marketing, subscriber churn from MVNOs could accelerate. In the industry, there are growing calls for the association to broaden its channels of discussion with policymakers to coordinate pending issues such as spectrum usage fees, the calculation and negotiation framework for wholesale charges, and easing the burden of security regulations, and to craft a unified response.
Yang is scheduled to complete his term as president of ICT Polytech University in Feb. and take office as full-time vice president of the MVNO Association. He is expected to oversee association operations and handle tasks such as consultations with the government and the National Assembly.