④ The three telecommunications companies control 60% of the budget phone market… Network usage fees alone amount to KRW 1.2 trillion a year.

#Office worker Lee Jin-gwang (34) signed up for ‘Moving Data 15G+’ provided by Unicoms, a small and medium-sized budget phone company, last April. This plan allows you to use 15 gigabytes ( GB ) of data by paying 32,300 won per month . Currently, the fee charged to Mr. Lee is ‘0 won’. This is because it is sold as a ‘0 won plan’ that does not pay fees for 7 months at the time of subscription. However, the ‘0 won plan’ of a budget phone company that was popular, including this plan, disappeared from the market for a while. This is because the three telecommunications companies have lowered the operating subsidy of 200,000 won per subscriber that they were paying to budget phone companies to half. # #Photographer

Seo Dong-seon (52) paid 41,500 won per month for KT M-Mobile’s ‘5G All .’ Everyone is using the ‘110GB+’ plan. The amount of data he uses per month is about 40 gigabytes ( GB ), but this is because he often transmits high-capacity photos via cell phone tethering during business trips to rural areas. He said, “There are unlimited data plans for less than 40,000 won, but the QoS (speed limit after data exhaustion) is limited to less than 1Mbps, so you can barely check KakaoTalk.” Because budget phone companies borrow the networks of the three telecommunications companies, they cannot design the amount of data provided and QoS as they wish. #

SK Telecom, KT , LGThe three telecommunications companies, including U+, dominate the budget phone market with their subsidiaries. KT M-Mobile, KT Skylife, LG Hello Vision, Media Log, and SK Telink are all interfering with everything from budget phone plans to discount benefits. The three telecommunications companies play the role of ‘super power’ because they lend their networks to budget phone companies. Kim Hyeong-jin, chairman of the Korea Thrifty Telecommunications Business Association (Chairman of Sejong Telecom), said, “The three telecommunications companies are virtually controlling the budget phone market through business subsidies and wholesale fees (fees for using the communication network provided by the three telecommunications companies to budget phone companies).” .

Subsidiaries of the three telecommunication companies are ‘profitable’… Small and medium-sized phone companies are in the red
According to the Korea Information and Communication Policy Institute ( KISDI )’s ‘Telecommunication market competition situation and direction of discussion to promote competition’ on the 12th, as of 2021, the three telecommunication companies, including KT M-Mobile, KT Skylife, LG Hello Vision, Media Log, and SK Telink, own The sales share of the five subsidiaries in the budget phone market exceeds 60%. Strictly speaking, the budget phone market is also structured in such a way that the three telecommunication companies dominate the market and monopolize profits. Therefore, the three telecommunication companies account for 97.9% of total telecommunication service sales.

When comparing the performance of the budget phone subsidiaries of the three telecommunications companies and small and medium-sized budget phone companies, the difference is clearly revealed. KT M-Mobile, a subsidiary of KT and number one in the budget phone industry, had sales of 262.4 billion won last year. This is four times more than Sejong Telecom (KRW 68.4 billion), the largest budget phone company. While KT M-Mobile recorded an operating profit of 7.8 billion won, Sejong Telecom recorded an operating loss of 5.5 billion won. The situation is the same when comparing SK Telink , a subsidiary of SK Telecom , and Unicoms, which operates Mobing. SK Telink’s sales are 302.6 billion won, which is five times that of Unicoms (59.8 billion won). Operating profitSK Telink’s KRW 18.7 billion is more than 7 times more than Unicoms’ KRW 2.5 billion.

In 2014, the government permitted subsidiaries of the three telecommunication companies to enter the budget phone market, setting the condition for a combined market share of less than 50%. However, this condition is currently ineffective. The 50% limit on the number of lines for subsidiaries of the three telecommunications companies is only a condition at the time of entry permission, and there is no legal basis to request withdrawal from the market because the current market share exceeds 50%. In 2021, voices were raised centering around the National Assembly and the government that the market share of the budget phone market of the subsidiaries of the three telecommunications companies should be regulated, but legislation failed as the three telecommunication companies opposed the plan by withdrawing from the budget phone market. Kim Joo-hyung, team leader of the People’s Solidarity for Participatory Democracy’s Economic and Financial Center, said, “As the telecommunications business has a strong public service nature, an active government policy is needed to completely expel the subsidiaries of the three telecommunication companies from the budget phone market and mandate the provision of wholesale prices at the cost level.” .

“Use budget phones on 

LTE and don’t move on to 5G.”
The three telecommunications companies are maintaining wholesale prices corresponding to communication network usage fees at a high level, and are effectively blocking the entry of budget phones into the 5G (5th generation mobile communication) market by limiting the QoS speed of unlimited rate plans. They keep the profitable 5G service for themselves, and only give up the relatively low-profit LTE (4th generation mobile communication) to budget phone companies. In fact, it can be said that the three telecommunication companies are hindering the launch of 5G plan for budget phones. Accordingly, even though the number of domestic 5G subscribers exceeds 31 million (as of last July), the number of budget phone subscribers remains at around 280,000 (0.9%). This is because the three telecommunication companies are maintaining the 5G wholesale price they provide to budget phones at a high level.

According to the industry, the profit sharing rate (network usage fee) that the three telecommunication companies receive from providing LTE networks to budget phones is around 40%. On the other hand, the revenue sharing ratio for 5G fees exceeds 60%. To put it simply, if a budget phone sells an LTE plan worth 30,000 won per month to a consumer, the three telecommunication companies sit back and receive 12,000 won per month, which is equivalent to 40%. However, when a 5G plan of the same amount is sold, the three telecommunication companies take 18,000 won, which is 소닉카지노more than the budget phone company, in exchange for network use. Considering that the number of subscribed mobile phone lines exceeds 8.23 ​​million (as of last July), a simple calculation shows that the three telecommunications companies are earning about 100 billion won each month just in network usage fees.

An executive at a small and medium-sized budget phone company said, “The three telecommunications companies say to budget phones, ‘You“We are sending a clear signal that ‘only play on LTE and do not move on to 5G,’” he said. “The wholesale price of 5G, which is 1.5 to 1.8 times more expensive than LTE , and QoS (speed limit after data exhaustion) restrictions are preventing the three telecommunications companies from entering the 5G market with budget phones.” “It is a representative example of preventing this.”

E-Mart and Homeplus’ budget phone business failed due to barriers between the three telecommunication companies
The telecommunications market dominated by the three telecommunication companies is also blocking the entry of large companies belonging to different industries. This is why E-Mart, which started the budget phone business by borrowing KT and LG U+ networks in 2013 , closed down the budget phone business after four years. At that time, E-Mart attracted 80,000 subscribers by offering benefits such as a 3,000 won discount on communication fees when shopping over 300,000 won. However, as the deficit piled up, they withdrew. Homeplus also entered the budget phone business in the same year as E-Mart, but was unable to avoid losses and left the budget phone market after two years.

In the case of KB Finance’s budget phone service ‘Live Mobile’, it started its budget phone service through the regulatory sandbox in 2019. Live Mobile carried out aggressive marketing, including being the first in the budget phone industry to launch 5G services, but the number of subscribers (400,000) has stagnated and the company has been left out. Viva Republica’s budget phone service Toss Mobile, which entered the market early this year, also attracted expectations with its refund system that allows users to receive cashback for remaining data, but is unable to overcome the limitation of borrowing the networks of three telecommunication companies.

As telecommunications is an industry where business competitiveness is determined by the possession of a telecommunication network, the prevailing view is that the monopoly system of the three telecommunication companies will continue in the future. This is because the three telecommunications companies have established a monopoly system with huge investments, creating an industrial structure that will not be shaken no matter which large company enters.

Kim Yong-hee, a professor at Dongguk University’s Graduate School of Film, said, “In the current situation where the three telecommunication companies have established a telecommunication network and maintain a monopoly system, even if other large companies enter the market, they cannot play the role of a catfish,” adding, “Attracting overseas telecommunication companies using satellite communication, etc. “We need to reorganize the telecommunications market from a forward-looking perspective,” he said.

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