Tuesday, 1 September 2009

MNOs being pushed down the MVNO route – South Korea

In an effort to push down voice call prices within the South Korean mobile market, the regulator has brought in three new rules for MNOs to adhere to. The most important for opening up the market is the adoption of MVNOs. The regulator, The Korean Communications Commission (KCC), is looking for MNOs to start partnering with MVNOs sooner rather than later.

As is the experience in most other countries, the regulator asking does not always mean action. The partnering of MVNOs comes about from an MNO having spare spectrum and not being the market leader. The number one operator has the most to lose from price competition which leads to falling ARPU and churn from them to the MVNOs. The MNOs with the least market share and low ARPUs stand to gain from filling up their spectrum with MVNOs and seeing a revenue stream from the action.

According to recent research within Blycroft’s MNO Directory 2009, South Korea as at Q408 had over 45 million mobile subscribers across just 3 MNOs. LGT, 3rd placed MNO, had just 18% of the market share as at Q408 and based upon the above would be the first port of call for those looking to partner for an MVNO.