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'Multiple MVNO' Strategy to be adopted in Resale Phone Industry, Multiple Circuit Strategy to spread
02/16/2015 | By Kim Yong-joo (kyj@etnews.com)

Resale phone makers are showing signs to competitively introduce ‘multiple MVNO’ strategy to use two or more mobile carrier circuits.

 

This is analyzed as a strategy to expand the base of resale phones by increasing subscribers’ options. Accordingly, multiple circuit strategy is forecast to spread in the resale phone industry. 

 

Free Telecom (CEO: Kim Hong-cheol) announced on the 15th that it would start resale phone business by adding on SK Telecom circuit to the existing KT circuit within the first quarter. 

 

Space Net (CEO: Kim Hong-cheol), which uses LGU+ circuit, is substantially a company on its own. Therefore, Free Telecom became the first resale phone company in Korea that uses the circuits of all three mobile carriers. 

 

With the utilization of three mobile carriers’ circuits as a momentum, Free Telecom and Space Net plan to reborn a resale phone industry leader by integrating the brand name to ‘Free Telecom.’ 

 

Resale phone (MVNO) provides mobile communications service by leasing communications networks of the three mobile carriers. Up until 2013, it had been limited for a single company to use the circuit of one mobile carrier only.

 

However, the restriction was lifted as ‘multiple MVNO’ system was permitted last year. Home Plus and S1 started pilot service first. 

 

Accordingly, the number of companies adopting multiple MVNO strategy is forecast to increase rapidly. In January, E-mart joined in to use this strategy by adding on LGU+ network to the existing SK Telecom network. In addition to Free Telecom, most resale phone makers including UniComs, Merchant Korea and EyesVision are preparing for communications network expansion.

 

Multiple MVNO strategy is helpful to both resale phone makers and mobile carriers. The power of this strategy is demonstrated by the case of E-mart. The number of E-mart’s resale phone subscribers in January was around 5,700 and approximately 5,500, which is a majority, were from LGU+ network, which began service in January. E-mart would not have been able to achieve such a result had it used only one network. 

 

“Mobile carriers are in a situation where they have to welcome resale phone companies,” said a resale phone industry insider.

 

“Resale phone subscribers are included in market share statistics of the three mobile carriers. As much as so, they will compete with one another to attract more resale phone makers.” 

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