The capital requirement for registering mobile virtual network operator (MVNO) businesses will be raised from 300 million won to 1 billion won. This change aims to address issues arising in the MVNO market, such as ghost phones (phones registered under a different name than the actual user).
According to the telecommunications industry on the 2nd, the Ministry of Science and ICT announced a legislative notice for its partial amendment to the Telecommunications Business Act on the 30th. The amendment aims to extend the previously stricter registration requirements for MVNOs using SK Telecom's network to include those utilizing KT and LG Uplus networks. Although the capital requirement has been raised to 1 billion won, MVNOs utilizing SK Telecom's network will maintain the existing capital requirement of 3 billion won.
Additionally, the regulations have been tightened to require MVNOs to submit a user protection plan. Previously, only operators using SK Telecom's network were required to submit such plans.
The Ministry of Science and ICT cited the background of the legal amendment as concerns over ghost phones and personal information leaks for political activities. The Ministry noted, "Since their emergence in 2011, MVNOs have grown to capture 17% of the overall mobile communication market due to their lower prices, but the process of opening up entry into the telecommunications market has created issues with user trust due to lax entry requirements."
The user protection plan that MVNOs using KT and LG Uplus's networks must submit must include provisions for establishing a dedicated organization for personal information protection and appointing responsible executives. They must also ensure at least one complaint resolution staff member for every 10,000 customers, and establish procedures for the protection, management, and disposal of personal information. In addition, the establishment of a 'special organization for user communication privacy' and mandatory retention of complaint processing records will be enforced. The government can impose sanctions such as fines or cancellation of registration if MVNOs violate the registration requirements. This amendment will undergo public consultation until the 9th of next month before being submitted for approval in the Cabinet meeting, with a target implementation date set for the second half of this year.