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KCC agrees wholesale pricing guidelines for MVNOs

18 Nov 2010

South Korea’s telecoms watchdog, the Korea Communications Commission (KCC) has reportedly agreed on guidelines for the wholesale pricing of voice minutes with the country’s mobile network operators, the Korea Times is reporting. It is understood that the agreement has been made in preparation for the introduction of mobile virtual network operators (MVNOs), which is expected in April 2011. The KCC has said that wholesale minutes will be between 31% and 44% cheaper than retail prices, with larger discounts offered to those virtual operators that have invested higher amounts in their own equipment, thus reducing their dependence on the network operators themselves. Companies considering an entrance to the MVNO sector, which include a number of cable TV providers, had previously argued that such ventures would only be feasible if wholesale charges were some 60% cheaper than retail, while cellco SK Telecom (SKT) had claimed that too high a discount could see the sector flooded with low-quality services, instead pressing for a 30%-35% discount.

Prices for consumers meanwhile are expected to drop by around 20%, according the regulator, which noted: ‘Currently, SK Telecom’s retail prices for voice, when counting in the subscription fees and basic rates, are around KRW131 (USD0.11) per minute, but MVNOs could purchase this capacity for KRW65.5 per minute at the cheapest … With MVNOs providing voice services that are 20% cheaper than current ones, we are expecting a full-blown price contest.’

The country’s largest cellco by subscribers, SKT reportedly already has virtual operator agreements in place with Korea Cable Telecom, which currently manages VoIP services provided by cable television operators, and long-distance call operator Onse Telecom.

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