The government will again expand the reduction range of radio frequency usage fees to lower the expense burden on small MVNOs. It also decided to keep the reduction program, which was set to end next year, in place for three more years.
The Ministry of Science and ICT on the 26th announced, in a joint briefing with related ministries at the Emergency Economic Headquarters meeting, the ministers' meeting on economic affairs, and the task force (TF) on special management of essential consumer prices held at Government Complex Seoul, a plan titled "Stabilizing essential consumer prices and reducing the burden on low-income households."
Radio frequency usage fees are the expense that telecom operators pay for using radio waves. The reduction rate for small MVNOs was 100% until before 2024, but it was gradually lowered to 80% last year and 50% this year. Under the existing plan, the reduction benefit was to disappear starting next year.
The government plans to raise the reduction rate to 90% from next year through a revision of the Enforcement Decree of the Radio Waves Act and extend the application period by three years. However, MVNOs affiliated with large corporations have been excluded from the reduction since 2023.
The Ministry of Science and ICT said it took into account that MVNO plans are significantly cheaper than those of the three mobile carriers, meaning a high share of users with high price sensitivity, such as young people and vulnerable groups. It also viewed that expense relief is needed because many small MVNOs are posting losses.
MVNOs do not own their own networks but provide services by leasing the mobile carriers' networks. For this reason, changes in wholesale prices and radio frequency usage fees directly affect operators' room to design rates. The government expects this measure will reduce the management burden on small operators and serve as a catalyst for launching low-priced plans and spurring competition to cut phone bills.
Separately, the Ministry of Science and ICT is also reviewing a plan to expand to MVNOs the "data safety option (QoS)," which it decided to apply first to the three mobile carriers. The government plans to unveil a comprehensive package in Aug. to strengthen the competitiveness of the MVNO industry and ease the burden of household telecom bills.