The government plans to expand the reduction of spectrum usage fees for mobile virtual network operators (MVNOs) to 90%. However, this benefit will not extend to large corporations and financial affiliates, raising concerns about fairness. The entire MVNO market is already struggling with declining profitability, making the impact of the fee reduction on lowering MVNO rates expected to be limited.
According to industry sources on October 21, there have been calls for the inclusion of large corporations and financial affiliates in the spectrum fee reduction measures. Despite providing the same MVNO services, the burden of spectrum fees varies based on the size and affiliation of the operators, increasing costs for low-rate plans and service investments.
In particular, cable and satellite operators that also run MVNOs are facing dual challenges. They are grappling with declining profitability in the pay-TV market while also bearing the burden of reduced profitability and spectrum fees in the MVNO sector.
Earlier, the Ministry of Science and ICT announced in June that it would expand the spectrum fee reduction rate for small and medium-sized MVNOs to 90% starting in 2027. This measure aims to lower the cost burden on these operators and enhance their competitiveness.
However, large corporations and financial affiliates are excluded from this expanded reduction. While small and medium-sized MVNOs will see their fee reduction rate increase from 50% this year to 90% next year, large corporations and financial affiliates have had their fee reduction benefits end since 2023 and are now responsible for the full spectrum fee.
The issue is that the majority of MVNO subscribers are concentrated among large corporations and financial affiliates. Despite facing similar challenges, these operators bear a greater burden, limiting the effectiveness of the spectrum fee reduction policy. Industry estimates suggest that small and medium-sized operators accounted for about 48% of subscribers last year, while approximately 52% used services from large corporations and financial affiliates.
The burden of spectrum fees for MVNOs is more than double that of the three major telecom companies. Due to lower rates, the proportion of spectrum fees is higher. According to the Ministry of Science and ICT, the average monthly fee for MVNO subscribers is 17,570 won, which is about 48.7% of the average fee of the three major telecom companies (36,050 won).
When comparing the average monthly spectrum fee of 400 won applied uniformly, the proportion of spectrum fees relative to average fees is 1.1% for the three major telecom companies and 2.3% for MVNOs.
An industry representative stated, "If the reduction benefits are expanded, it will provide the financial capacity to invest in developing low-rate plans, preventing voice phishing, and improving service quality through better data protection."
The Ministry of Science and ICT maintains that this differentiated support aligns with the original intent of the MVNO policy. Since MVNOs were introduced to foster alternative operators to challenge the three major telecom companies, the ministry aims to focus policy support on enhancing the competitiveness of independent operators.
The ministry plans to pursue policies that enable independent MVNOs to secure their competitiveness rather than expanding the spectrum fee reduction eligibility.
A ministry official explained, "To uphold the original intent of the MVNO policy, we have applied asymmetric regulations, such as limiting the combined market share of telecom subsidiaries to 50%, to prevent the dominance of telecom companies from transferring to the MVNO market."
* This article has been translated by AI.
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