South Korea's MVNOs to Go from Friend to Foe in the Long-term

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Since their introduction in 2012 in South Korea MVNOs have captured 2.35 million customers representing a market share of 4.3 percent.

Although currently complimentary suppliers to the mobile networks, Korea Investment and Securities warns that the big three networks could start to see price pressures once the MVNOs market share exceeds 8 percent.

That threshold is not predicted to be reached until 2016 though. From that point, MVNOs should see the government's policy support weaken, subscriber churn go up and mobile carriers keeping them in check as rivals.

The environment should offer advantages for SK Telecom. While the share of MVNO-based subscribers has expanded to 3.6%, its own subscribers did not dwindle much. Moreover, the company attracts MVNO subscribers through its subsidiary SK Telink (83.5% stake).

Meanwhile, KT has a larger MVNO portion of 6.8% but with a boomerang effect of subscriber attrition. The MVNO impact is negligible for LG U+ because the subscriber weighting is small (2.3%) and non-MVNO subscribers are rising.

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Domestic MVNO market breakdown

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Tags: mvno  Korea 

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