SK MVNOs cash in on MNO sales freeze

Dylan Bushell-Embling
25 Mar 2014
00:00

South Korea's MVNOs are allegedly cashing in on the sales suspensions imposed by regulators on the nation's three mobile operators, by using the same tactics the operators are being punished for.

Subscriptions to MVNO services have surged since the sales suspensions for KT and LG U+ took effect earlier this month, JoongAng Dailyreported, |home|newslist1 citing data from the Korea Telecommunication Operator Association and the Science Ministry.

Low-cost “thrifty phone” MVNOs in particular are benefiting, with three providers - CJ Hellovision, SK Telink and KCT – attracting an average of 4,139 new customers per day from March 13 to March 20. This is up 52% since before the first sanctions took effect.

By comparison, SK Telecom – the only operator not currently suspended from signing up new subscribers – saw its average daily new subscriptions decline 42.5% to 13,101 during the week in question.

But the mobile industry has accused CJ Hellovision in particular of achieving the strong growth by offering subsidies on handsets of as much as 700,000 won ($650), according to a related report.

Earlier this month, South Korea's communications ministry ordered 45 day staggered suspensions on all three mobile operators signing up new customers or selling handsets to existing customers whose contracts are under two years old.

The reason for the ban was that mobile operators had allegedly repeatedly violated the 270,000 won cap on handset subsidies. The report suggests that at least some MVNOs are doing the same.

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