MVNO Game in Korea

Abstract

Korea MVNO market is a multilayer game space where the government, MNOs, MVNOs and consumers affect each other. Here, game among MNOs and MVNOs will be mainly analyzed. Korea regulation authority tried to introduce MVNOs progressively when high communication cost had been a social issue for several years. The government could not help invigorate competition in the telecommunication market and curb monopoly. The necessity of MVNO introduction was recognized in early 2000s but MVNO launched in 2011 when the mobile telecommunication market was fully saturated in Korea. Korean government tried to improve business conditions for MVNOs and presents MVNO Activation Programs every year. But it may say paradoxically that the market is not fair still. MNOs have both network facilities and market power and negotiating power also. The major issues in MVNO game may be whole sale prices, phone supply, subsidy, monthly rate plans, and Mobile Distribution Act. MNOs and MVNOs vary in strategies according to their characteristics. The government has a role to maximize consumer surplus and social welfare through providing fair market condition with understanding the players of the market