Mobile Phone Business without Own Networks

In the future, mobile communication is expected to open to new companies that have their own networks and waves.

If so, the new companies can compete with existing communication companies by establishing virtual networks mobile company with its own brand and code.

According to communication industry at 17th, the Ministry of Information & Communication (MIC) has a plan to introduce MVNO (Mobile Virtual Network Operator) system, so then there is a possibility for fourth and fifth communication companies can appear. MVNO is a mobile communication company to operate business by leasing communication network from existing companies with its own brand.

Lee Sang-chul, the Minister of MIC, commented in National Administration Auditing at 16th “To manipulate market competition and increase consumer’s convenience, the ministry is study detail on MVNO system.” and answered to the question of Kim Young-chun, PM of Hannara Party, “The plan is prepared several methods such as excluding main communication company participating as dominant shareholder, etc.” So the MIC will prepare detailed guideline by the end of this year and open mobile communication market to MVNO from the next year.

Incase of other countries, mobile communication market is composed with small number of large sized companies, and introduces MVNO to activate market competition. In Europe, there are more than 70 MVNOs including Virgin Mobile and they stir up existing market. In Japan, MVNO has settled down in data communication rather than voice communication.

In Korea, SK Telecom, KTF and LG Telecom are opposed to MVNO because they should lend communication networks and may lose market share if it is introduced. On the other hand, wire communication and others welcome the system because it may offer them an opportunity to develop new market.

Tae-Han Kim freewill@donga.com