Korea moves to widen budget phone market with equipment rules

The science ministry said Wednesday it shared follow-up measures to its budget phone revitalization plan with major budget mobile carriers, aiming to lower their costs and push them beyond simple resale of network capacity.

At a meeting in Seoul chaired by Choi Woo-hyuk, head of the ministry's information protection and network policy office, officials outlined revisions to enforcement decrees and public notices under the Telecommunications Business Act that would help budget carriers owning part of their own network equipment — partial and full mobile virtual network operators — enter and grow in the market, along with policy financing support tied to those rules.

To cut costs for small and mid-sized operators and give them room to lower prices, the ministry introduced a revision to the enforcement decree of the Radio Waves Act expanding reductions in radio spectrum usage fees, including differentiated cuts for operators that violate the law. It also shared plans to raise the required staffing level for customer service and strengthen protections for users when a carrier suspends or closes its business.

The ministry said it will put the revised enforcement decrees and notices through administrative and legislative pre-announcement procedures in October.

The follow-up measures implement the budget phone revitalization plan announced on July 31 at a meeting of economic affairs ministers and a special task force on consumer prices. That plan called for expanding the number of budget carriers with their own equipment to three or more, widening spectrum fee discounts, promoting mid- and low-priced and unlocked handsets including second-hand phones, and reflecting eSIM in public notices.

At the meeting, carrier representatives discussed ways to keep budget phone prices competitive against the country's three major mobile operators and to move past simple resale toward investment in their own equipment and differentiated rates and services. The ministry urged the industry to step up investment and innovation and to reinforce customer service and user protections.

"This budget phone revitalization plan is a starting point for improving the constitution of the budget phone market by lowering carriers' cost burdens and expanding their capacity for service differentiation and innovation," Choi said. He added that the government will carry out the follow-up measures without disruption, keep communicating with the industry and reflect its views faithfully in policy and institutions.