Government points out 20 years of telecommunications monopoly… Expert “The 4th mobile operator needs to innovate rate plans”

The government is actively seeking measures to stimulate competition, such as attracting new operators, to improve the oligopoly structure of the three domestic mobile telecommunication companies that have lasted for over 20 years and induce the launch of differentiated rate plans. Most experts agreed on the oligopoly structure of domestic telecommunications companies. However, there was also a counterargument that attracting new business operators without resolving structural problems such as vitalizing competition has limited effect.

Park Yoon-gyu, 2nd Vice Minister of the Ministry of Science and ICT, said in a speech at the public debate on ‘Policy Measures to Promote Competition in the Telecommunications Market’ held at the Bank Hall International Conference Hall in Jung-gu, Seoul on the 2nd, “Amid the increasing burden on households due to telecommunications services, there is now sufficient competition in the telecommunications market.” And innovation has to happen,” he said.

Next, Vice Minister Park said, “(In the telecommunications market), I hope that innovative operators will come out and competition will become active.” We will find the obstacles and remove them,” he said.

Vice Minister Park promised to continue efforts to improve the competitiveness of budget phone operators. Vice Minister Park emphasized, “We will actively come up with ‘measures to improve the competitiveness of low-priced phones’ that enable low-cost phone operators to compete with the three telecommunication companies by providing differentiated services and having economies of scale, rather than being limited to small and low-cost telecommunication companies.”

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“France, a decrease in the share of the No. 1 operator attracting new operators”

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Kim Min-cheol, head of the KISDI (Information and Communications Policy Research Institute), presented a similar opinion. Director Park pointed out that the share of mobile communication service sales by the three domestic telecommunications companies reached 97.9% (as of 2021), exceeding the OECD (Organization for Economic Cooperation and Development) average. Considering the market share and rate level, it is difficult to say that competition was active. Director Kim argued, “The domestic telecommunications market is evaluated to be more affected by regulatory policies than competitive pressures between operators, and competition was insufficient in terms of market structure and rate level.”

Director Kim continued, mentioning the new entrants of France’s Free Mobile and Japan’s Rakuten, explaining that the market share of the No. 1 operator decreased and the market structure improved at the same time. This means that the entry of new carriers is having a positive effect on promoting policy in the telecommunications market. “In the case of France, the market share of the No. 1 operator decreased by 7.4 percentage points (p) due to the entry of new operators,” he said. There is also a survey result that the average year (from 2015) is 10.7 to 12.4% lower.”

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“There is no effect for new operators… the priority is to remove factors that hinder competition in rate plans”

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However, in the discussion that followed, there was a skeptical view of attracting new operators. Han Soon-gu, a professor at Yonsei University, said, “An increase in the number of carriers will promote competition, but it is questionable how much competition will be if one new carrier increases when there is no competition even with three carriers.” It will be more effective.”

Dr. Lee Tae-gyu of the Korea Economic Research Institute also said, “Telecommunication services target the domestic market with a limited scale, but as the low-growth trend is maintained in Korea, there does not seem to be a need to insist on attracting a 4th telecommunication company.” “The promotion of innovation through regulatory reform should be preceded to a level similar to ours,” he emphasized.

In order to lower the burden of communication charges, there was also a voice saying that the market for low- and mid-price phones should be developed. Jeong Ji-yeon, secretary-general of the Consumer Federation of Korea, said, “I believe that online-oriented budget phones have explosive potential in easing the burden on the telecommunications market. It could have an impact,” he said.

On the other hand, it was argued that the domestic telecommunications company’s rate plan is not expensive compared to the quality. Dr. Lee Tae-gyu said, “Korean telecommunications companies have invested heavily to strengthen their network competitiveness and have actually raised their network quality to the highest level in the world.” ” he pointed out.

[저작권자 @머니투데이, 무단전재 및 재배포 금지]