As the three mobile carriers expanded their integrated 5G-LTE plans into the 20,000 won range, shaking the price competitiveness of mobile virtual network operators, the government rolled out support measures that include cutting wholesale fees and reducing spectrum usage charges. But while the annual expense reduction benefit, estimated at about 25 billion won, varies widely by operator, efforts to strengthen customer counseling and security standards and to induce investment in proprietary facilities are expected to put a considerable burden on small players. Industry officials worry the package tilts more toward restructuring the market around large and affiliate-backed companies and cleaning up weak operators than supporting MVNOs. Some say the government plan, weighted toward restructuring rather than support, saves only the strong.
The Ministry of Science and ICT on the 31st announced its "MVNO 2.0" policy, which requires the three carriers to wholesale their new integrated plans to MVNOs. For about 90 revenue-sharing wholesale plans (where the carrier and MVNO split the subscriber's phone bill at a set ratio), the data safety option (QoS) will be applied at no additional expense, and wholesale prices for about 15 5G plans will be lowered by 1 to 3 percentage points. The reduction rate for spectrum usage fees for small and midsize MVNOs will also be raised from 50% to 90%. The government estimated this would cut expenses in the MVNO sector by about 25 billion won a year. At the same time, it will strengthen standards for call centers and personal data protection, and will revise related systems so that operators with weak competitiveness can be consolidated through mergers and acquisitions or closed or suspended.
◇ Says 25 billion won saved, but impact limited for small firms
The government's plan responds to the recent move by the three carriers to expand the data safety option to low-cost plans in the 20,000 won range. LG Uplus on June 1, KT on July 1, and SK Telecom on July 2 implemented integrated 5G-LTE plans. These integrated plans allow subscribers to continue using data at speeds such as 400 Kbps without extra charges even after exhausting their basic data, narrowing the service gap with MVNOs even for low-cost plans. As the prices of carrier products—which offer family and internet bundle discounts, memberships, offline dealerships, and call centers—have fallen, the distinct edge of MVNOs' "cheap rates" has weakened.
The government will lower by 1 to 3 percentage points the wholesale revenue split that MVNOs pay carriers on about 15 revenue-sharing 5G MVNO plans. This is not a 1% to 3% cut to the phone bill itself, but a method of reducing the share that goes to the carrier out of what the subscriber pays. As the expense an MVNO must pay a carrier per subscriber decreases, profitability improves, creating room to boost product competitiveness through price cuts or expanded data allowances. However, the reduction range will differ by carrier and plan, and whether the saved expense is actually used to lower consumer prices depends on each MVNO's decision.
The roughly 25 billion won cited by the government is not cash support. It is an estimate that sums the sector's total expense reduction from lower wholesale fees, free application of the safety option, and expanded spectrum fee cuts. The government did not disclose the reduction amounts by item. Considering the MVNO sector posted an operating loss of 25.8 billion won in 2024, the figure is not small, but the benefit will not be evenly distributed to all operators. The effect of lower wholesale fees is greater for operators with higher sales of the targeted revenue-sharing 5G plans.
◇ Higher standards for counseling, security, and facilities; possibility of restructuring around large firms
The government will require MVNOs to have one counselor per 10,000 subscribers, with at least three counseling staff, and will disclose call center evaluation results. It will also conduct a full review of compliance with registration requirements such as preventing fraudulent activations, protecting personal data, capital requirements, and call centers. According to the industry, of Korea's 59 MVNOs, 35 have 100,000 or fewer subscribers, and 12 do not even reach 10,000. Six are preparing to shut down.
For mergers and acquisitions, the government will allow users to be automatically transferred in the system without changing SIM cards, and will expand obligations to submit user protection plans in the event of suspension or closure. While reducing consumer inconvenience, this is seen as a mechanism to promote market restructuring by making it easier to sell off or exit operators that fail to meet strengthened standards.
There is also a view that not only the operators' operating standards but also future growth models are structured to favor companies with capital strength. The government will create legal status for "service-type" operators equipped with billing, collection, and subscriber authentication facilities, and for "independent-type" operators that also have traffic management facilities, and will foster at least three such operators by next year. It will also allow MVNEs to support corporations in finance, retail, and leisure to enter telecommunications.
However, substantial initial capital is needed to secure the related facilities and experts. Even with policy financing, operators affiliated with carriers or large corporations that already have subscribers, IT systems, and call centers are relatively advantaged. An MVNO industry official said, "The spectrum fee reduction helps small and midsize firms, but looking at the entire package—including stronger service standards and facility investment—operators with scale and capital could have an edge during market restructuring," adding, "If small operators fail to meet the standards and exit, large MVNOs could absorb their subscribers."