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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s mobile virtual network operator (MVNO) market saw a sharp slowdown in subscriber growth in the first quarter of the year, as aggressive subsidy campaigns by major telecom carriers drove increased switching between operators rather than migration to budget carriers.
According to data from the Korea Telecommunications Operators Association (KTOA) and industry sources on April 5, the number of subscribers moving to MVNO services totaled 50,706 in the first quarter, roughly half of the 106,423 recorded during the same period last year.
The decline was largely attributed to intensified promotional efforts by South Korea’s three major telecom operators. In January, KT Corporation waived early termination fees, triggering fierce subsidy competition across the industry.
During this period, effective subsidies for popular smartphone models—such as the Galaxy Z Flip series and the iPhone lineup—exceeded KRW 1 million when combining official support payments and dealer incentives. In some cases, subsidies surpassed device prices, enabling so-called “negative pricing” purchases.
In March, carriers further ramped up competition following the launch of the Galaxy S26 series, quickly raising official subsidies from around KRW 250,000 at launch to approximately KRW 500,000 within two weeks. This pace was notably faster than last year’s Galaxy S25 rollout, when subsidy increases took about a month.
Despite the release of new flagship devices in both years, the shift toward MVNOs weakened significantly. In February last year, when the Galaxy S25 launched, about 42,426 users moved to MVNO services. In contrast, only around 8,320 users switched in March this year following the Galaxy S26 launch.
Regulatory changes also contributed to the trend. Following the abolition of South Korea’s handset subsidy cap policy in July last year, limits on additional subsidies—previously capped at 15% of official support—were removed. Consumers are now able to receive additional subsidies even when opting for a 25% contract-based discount, increasing the appeal of carrier plans.
As a result, more consumers opted to purchase devices through telecom carriers with bundled subsidies and discounts, rather than buying unlocked devices paired with MVNO plans.
While MVNO growth slowed, the overall number portability market became more active. In the first quarter of last year, monthly number porting ranged between 490,000 and 570,000 users. This year, the figure surged to nearly 990,000 in January due to KT’s fee waiver, before easing to around 520,000 in February.
In March, number portability rebounded to approximately 630,000, driven by new device launches such as the Galaxy S26 series—well above the previous peak of around 570,000 recorded during last year’s Galaxy S25 release.
알파경제 Kim Jisun Reporter(stockmk2020@alphabiz.co.kr)
