The budget mobile provider (MVNO) market has recorded subscriber losses for two consecutive months. After maintaining a growth trend through the first quarter of this year, MVNOs shifted to a decline in April, which worsened in May.
According to data from the Korea Telecommunications Operators Association (KTOA) released on June 2, the net loss of MVNO subscribers in May was 11,211. This marks an increase of 3,858 from the 7,353 subscribers lost in April.
This marks the first time MVNOs have experienced two consecutive months of subscriber losses since the SK Telecom (SKT) SIM card hacking incident in August and September of last year.
However, analysts note that this decline is occurring amid intensified competition among the three major telecom companies (SKT, KT, and LG Uplus) to attract subscribers. Following the repeal of the Mobile Device Distribution Improvement Act (the Device Subsidy Act), competition for subsidies among telecom companies has intensified. In May, significant funding was allocated for the Galaxy S26 series and distribution incentives, accelerating the departure of MVNO users.
The trend of subscriber losses in the MVNO market is expected to worsen. LG Uplus has introduced an integrated pricing plan that includes 5G plans priced in the 20,000 won range, and SKT and KT are set to launch mid-range pricing plans on July 1. This raises concerns that the appeal of low-cost plans, which have been a key competitive advantage for MVNOs, may diminish.
The mobile telecommunications market is rapidly shifting from LTE to 5G. According to the Ministry of Science and ICT, as of March 21, the number of LTE subscribers decreased from 19,329,763 in August of last year to 18,323,894 in March, a drop of 1,005,869. In contrast, the number of 5G subscribers increased from 37,506,623 to 38,927,406 during the same period, an increase of 1,426,783.
The issue is that the MVNO market remains predominantly LTE-based. As of March, LTE subscribers accounted for 93% of all MVNO subscribers, totaling 9,713,009, while 5G subscribers numbered only 584,315, representing just 5.6% of the total.
Industry experts express concern that if the three major telecom companies expand integrated pricing plans that combine 5G services with LTE pricing, the demand for low-cost LTE plans—MVNOs' core competitive advantage—could diminish. The ongoing subscriber losses for MVNOs are seen as closely related to these market changes.
Some analysts argue that the government's telecommunications cost reduction policy may conflict with efforts to support MVNOs. While the government has historically supported MVNOs to enhance competition in the telecom market, the recent push for mid-range 5G pricing plans from mobile carriers may inadvertently weaken the price competitiveness of MVNOs.
One industry expert stated, "In a market where MVNOs exist, directly lowering the prices of telecom companies can ultimately narrow the space for MVNO operators. If the goal is to alleviate the burden of telecommunications costs, it would be more effective to lower the wholesale prices for MVNOs rather than adjusting the retail prices of mobile carriers."
* This article has been translated by AI.
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