For the government’s “MVNO 2.0” policy to deliver results, subscriber concentration at mobile network operator (MNO) subsidiaries must be eased while independent budget carriers build their ability to survive on their own, a proposal said. The assessment said the market needs to move away from subscriber-driven quantitative growth and shift to one with sustainable business models.

The office of Democratic Party lawmaker Ju-hee Lee (이주희) held a policy seminar titled “MVNO 2.0, from quantitative growth to qualitative growth” at the National Assembly Members’ Office Building on Thursday. It examined the MVNO 2.0 measures previously announced by the Ministry of Science and ICT and discussed ways to grow the industry going forward.

Hyo-chang Bang (방효창), a professor at Doowon Technical University College, highlighted the existing concentration toward MNO subsidiaries. Bang said five MNO subsidiaries account for 47.5 percent of subscribers among 59 MVNO operators. “Fewer than 1 out of 10 operators account for nearly half of the market,” he said. “It is only being held back by regulation.”

Wholesale network charges, which determine MVNO profitability, are set by MNOs. Bang said the space for smaller MVNOs has narrowed as subscribers leaving an MNO move to the MNO’s MVNO subsidiary. He pointed to what he called an uneven starting line, saying MNO subsidiaries provide giveaways worth more than their plans, backed by capital strength.

Bang stressed the need for laws and systems to break the situation. He presented future tasks including legislation to ban unfair support, full transparency of affiliated transactions, rules on cross-subsidies by financial institutions and the creation of a wholesale environment that enables competition.

He said transactions between MNOs and their subsidiaries should be disclosed transparently, while support actions by affiliates such as cross-subsidising marketing costs and sharing employees and distribution networks should be regulated. He also stressed creating conditions for fair competition between MNO subsidiaries and smaller MVNOs, including a dispute mediation process in wholesale negotiations and the provision of jointly used computing and security infrastructure. He also cited the need for systems such as a cap on market share and mandatory explanations of funding sources for cash-like benefits.

“If competitors disappear, cheap plans also disappear,” Bang said. “When competition is under the same rules, consumers’ right to choose will also be protected.”

A separate argument said the government’s support approach should change so independent MVNOs can build competitiveness on their own. Dae-geun Cho (조대근), a senior adviser at law firm Lee & Ko and an adjunct professor at Sogang University’s Graduate School of Public Policy, stressed the need to move from policies centred on “protection and nurturing” to a new policy framework that promotes sustainable competition. “We need policies that serve as a priming pump for self-reliance, not blind support for survival,” Cho said. “We need to build an ecosystem where each operator can focus on customers and product development.”

He also said the criteria for evaluating the market should change. Rather than judging policy outcomes only by quantitative indicators such as subscriber numbers, he proposed assessing in tandem whether independent MVNOs have secured sustainable business models and service capabilities.

Cho said independent MVNOs need the authority to choose wholesale networks and independence in setting prices. He also proposed selective mergers and acquisitions, combining product and operational functions, as a way for independent operators to build scale and competitiveness. He cited future tasks including using shared platforms and facilities, pursuing alliances and integration among operators, developing specialised services and creating a structure that allows each operator to focus on acquiring customers and developing products.

In a panel discussion, a view was also raised that the MNO and MVNO markets should be separated more clearly to revitalise the market. Ju-ho Kim (김주호), head of the People’s Livelihood Economy Team at the civic group People’s Solidarity for Participatory Democracy, said the Telecommunications Business Act should be amended to gradually lower the market share cap for MNO subsidiaries. He also proposed active investment and support to strengthen the competitiveness of independent MVNOs, including operating an integrated customer service centre, diversifying businesses and launching region-specific services.

The government plans to review such industry views and move to improve policy. Gyu-cheol Song (송규철), director of the Telecommunications Competition Policy Division at the Ministry of Science and ICT, said, “We sympathise with the sense of problems and difficulties the industry feels, as well as the overall ideas.” He added, “We will review policy improvements while communicating closely with the industry going forward.”