[DigitalToday, reporter Jin-ho Lee] The government will expand wholesale plans offered by mobile operators and cut wholesale charges to boost the tariff competitiveness of budget mobile carriers. It will also improve related systems and investment support so budget carriers with their own telecom facilities can enter the market.

The Ministry of Science and ICT announced the plan at a meeting of ministers for economic affairs and a task force on special management of consumer prices on July 31.

According to the ministry, 59 operators have entered South Korea's budget mobile market, and subscribers have topped 10 million. But most operators resell mobile carriers' plans without their own facilities, drawing criticism that it is hard to design independent tariffs and services beyond discounts. Issues over user protection have also been raised, including poor call centre operations and vulnerability to voice phishing.

The ministry defines the existing quantitative growth of the budget mobile market as "Budget Mobile 1.0" and will pursue a "Budget Mobile 2.0" policy to improve three areas: price, innovation and diversity, and trust.

◆ 5G wholesale charges cut by up to 3 percentage points... spectrum fee reduction rate to 90%

First, the three mobile operators will provide newly revised plans that apply a data assurance option (QoS·400 Kbps) to budget mobile operators from August in stages through a revenue-sharing (RS) wholesale model. Under revenue sharing, a budget mobile operator splits a portion of tariff revenue collected from subscribers with the mobile operator.

About 90 existing revenue-sharing wholesale plans will apply the data assurance option without additional cost sharing. In particular, for about 15 5G plans, the wholesale charges that go to mobile operators will be cut by 1 to 3 percentage points depending on the operator.

For usage-based (RM) plans, the ministry will expand wholesale provision of the data assurance option and induce cost cuts. The spectrum fee reduction rate for smaller budget mobile operators will be expanded to 90 percent from 50 percent after consultations with fiscal authorities. The ministry will also set a basis to apply different reduction rates depending on compliance with laws and the level of user protection. The ministry expects these measures will help the budget mobile industry as a whole save about 25 billion won a year in costs.

The ministry will also support securing mid- and low-priced handsets that can be bundled with budget mobile services. Since a certification system for safe transactions of used phones was introduced in May last year, 47 operators joined in about a year and recorded transactions of about 1.1 million certified used phones. The ministry will revitalise the certification system and form a consultative body involving relevant ministries, manufacturers and distributors to expand mid- and low-priced and unlocked handsets.

It will pursue revisions to an interconnection notice to boost the use of eSIMs that can be activated immediately online. In cooperation with the Personal Information Protection Commission, it will also expand mydata-based customised tariff comparison and recommendation services to major budget mobile operators.

The ministry will also conduct a comprehensive evaluation within this year of competition conditions after the shift to a system of voluntary negotiations on wholesale charges and use it to review the regulatory framework.

◆ Support growth of budget carriers with their own facilities... "building an investment ladder"

It will also build an "investment ladder" to support the growth of budget mobile operators with their own facilities. The aim is to foster operators that go beyond simple resale and provide various plans and partnered services based on their own facilities.

The ministry will set legal definitions and facility requirements for service-type budget carriers (partial MVNOs) that design plans and partnered services with their own facilities while renting mobile networks, and for independent budget carriers (full MVNOs) that also have traffic management facilities.

It will expand the mandatory network interconnection providers to the three mobile operators and allow wholesale charges and facility usage fees to be calculated differently depending on the level of facility ownership. Wholesale charges for independent budget carriers will in principle be based on voluntary negotiations, but if an operator raises an objection, the government will verify after the fact whether the charge calculation is appropriate.

To promote the entry of non-telecom companies such as finance, distribution and leisure firms into the budget mobile market, it will allow a shared infrastructure (MVNE) model that re-provides budget mobile infrastructure to other operators. It will also pursue support linked to policy financing to ease the burden of facility investment.

The ministry plans to begin revising the Enforcement Decree of the Telecommunications Business Act, a wholesale provision notice and an interconnection notice from August.

◆ Tighten call centre standards and manage and force out weak operators

It will also strengthen user protection standards. The ministry will overhaul registration and operating requirements for budget mobile operators and set standards for managing and forcing out weak and marginal operators that lack customer service and user protection capabilities.

To address call centre connection delays, it will raise staffing standards and conduct regular evaluations of call centres and comprehensive inspections of market conditions. It will increase user protection training for smaller operators and also revise compliance guidelines to reduce user inconvenience during mergers and acquisitions.

The ministry said, "We expect these measures will continuously expand the number of budget mobile subscribers and create a sustainable budget mobile ecosystem, including by increasing by at least 3 the number of service-type and independent budget mobile operators that have their own facilities."