Logos of the three mobile carriers. picture. Each company
[데일리임팩트 황재희 기자] Opinions are divided about the ‘transition subsidy’ implemented to promote competition among the three mobile carriers.
The government expects that the ‘conversion subsidy’ system, which provides up to 500,000 won, will reduce the burden of household communication costs by revitalizing marketing competition among the three mobile carriers.
However, the reaction of actual consumers is not positive. Some civic groups are taking issue with this as reverse discrimination against long-term users, as it is a benefit that can be received when changing telecommunication companies. There are also concerns that the possibility that the sharing structure centered on the three mobile carriers will become more entrenched by shrinking budget phone operators in the long term cannot be ruled out. Accordingly, voices in the industry calling for urgent reform of the system are gaining weight.
According to the industry on the 14th, the Korea Communications Commission (KCC) decided to revise the standards for payment of number portability conversion subsidies, etc. as a follow-up measure following the revision of the enforcement ordinance of the Mobile Communications Terminal Device Distribution Structure Improvement Act (Smart Communication Act) and implement it from this day.
Accordingly, number portability users who change telecommunication companies in the future will be able to receive a conversion subsidy of up to 500,000 won. If the conversion subsidy is added to the current publicly announced subsidy, consumers can receive a discount on the cost of purchasing a terminal up to 1.15 million won.
Unlike the government, which is active in revising the enforcement ordinance ahead of the abolition of the Single Tong Act, the industry’s response to the transition subsidy is lukewarm. On the first day of implementation, there has been no significant movement so far. The standard of up to 500,000 won is a kind of guideline, and the amount is determined autonomously by companies. The battle to increase subsidies compared to competitors is fierce.
Some voices are concerned about whether the transition subsidy can be of great help in reducing household communication costs. Some civic groups, including Seoul YMCA, point out that while the Single Tong Act has not been abolished, enforcement ordinances and notices that conflict with existing laws have been enacted, which is actually aggravating market and consumer confusion.
An official from Seoul YMCA’s citizen relay office told Daily Impact, “The reason the mobile phone law was enacted was to prevent consumers from discriminating when purchasing a terminal, but with this conversion subsidy, an exception has been made that provides discriminatory subsidy only to consumers who transfer numbers.” “It does not meet the purpose of alleviating the burden of household communication costs for all consumers, and the policy direction is being implemented hastily and without elaborate design, so there are many loopholes,” he said.
In online communities, rather than being happy about the conversion subsidy, voices are expressing disappointment because it is a benefit limited to only a few users.
One user said, “Unlike single-person households, each family or household often receives a reduction in communication costs because their rates are tied to family unions, IPTV, etc.” He said. Another user also raised a question to Daily Impact, saying, “Isn’t there a new strategy of stealing budget phone subscribers by bypassing subsidies without reducing the main rate plans of the three telecommunication companies?”
There is also an opinion that the transition subsidy runs counter to the government policy that has been struggling to resolve the oligopoly structure of the three mobile carriers.
The government has been fostering low-cost phone operators as actual competitors for the three mobile carriers. Accordingly, as of the end of last year, among the total number of domestic wireless communication users (approximately 83.89 million), MVNO subscribers have grown to account for 15.85 million, or 18.9% of the total.
However, once this conversion subsidy is implemented in earnest, there is a high possibility that the growth of the budget phone market will no longer occur. Budget phone operators were also concerned about this, and when the Korea Communications Commission pushed for the enactment of a related notice, they raised their voices against it and demanded policy improvement.
A low-cost phone operator told Daily Impact, “We have been leading the way in lowering the public’s communication costs by fighting against the three mobile carriers, but if the number of number portability users increases due to the conversion subsidy, we are the ones who will ultimately suffer,” adding, “Without institutional supplementary measures for low-cost phone operators, we have been leading the way in reducing communication costs for the public.” “I want to ask why they rushed to introduce a system that only benefits business owners,” he said.
