Tuesday, 15 September 2009

Credit card companies want to be MVNOs – South Korea

The Korea Times has reported that credit card companies within South Korea are actively pursuing entry into the telecommunications market as MVNOs. Notably it pinpoints BC Card as being the most active in pursuing a mobile venture and even states the company has put aside USD 160 million for an MVNO.

Commenting on why credit card companies would be interested, an official from The Korea Communications Commission commented: "MVNOs won't have a prayer of prying away subscribers from existing wireless carriers in the traditional way. However, there are a lot of possibilities, such as developing new mobile financial services on new handsets and also introducing data services that take advantage of their strengths in their traditional business sectors."

This is the most likely explanation as to why credit card companies would want to venture into mobile and why a network would partner with one. Mobile payments (from sending money electronically to using a phone to purchase goods) as well as wireless chip and pin devices have brought finance houses and mobile phone companies together. Both rely upon each other for the services to work and both want to maximise their profit margins. As ever, it only takes one operator to allow an MVNO onto its network for the others to have no choice but to follow and allow MVNOs.