Guidelines will target thrifty-phone marketplace

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Guidelines will target thrifty-phone marketplace

The Ministry of Science, ICT and Future Planning said Monday it is legislating “guidelines to protect thrifty phone users” for mobile virtual network operators (MVNOs).

The number of thrifty phone users has nearly tripled since March 2013, when there were 1.55 million subscribers.

MVNOs have secured 4.31 million subscribers as of September, which accounted for 7.5 percent of the mobile communications market.

The reason behind the popularity of thrifty phones is that there are about 80 monthly plans that are half the price of those from SK Telecom, KT and LG U+.

In addition, analysts predict the number will continue to rise due to the Mobile Device Distribution Improvement Act, which slashed subsidies on smartphones. People now tend to look for cheaper monthly plans instead.

“It is true that a lot of mobile phone users migrate to MVNOs as they try to cut mobile communications costs,” said a spokesman for the leading mobile carrier, SK.

However, compared to the rapid growth of the thrifty phone market, user protection is still weak.

“Along with the thrifty phone market growth, the number of user complaints is increasing and people are not satisfied with the consumer protection of MVNOs,” said Kim Joon-mo, a spokesman for the Science Ministry.

“There were growing concerns that if we overlook this problem, the sustainable growth of the thrifty phone market might be threatened.”

Thus, the Science Ministry plans to raise the consumer protection level up to that of the three leading mobile carriers through the enactment of the guidelines.

Through the guidelines, the ministry plans to ban false and exaggerated advertisements and illegal telemarketing; mandate that MVNOs describe the exact terms and conditions of contracts to consumers; establish a customer service system to resolve complaints; avoid identity theft; and notify consumers in advance of holidays or the close of business.

Accordingly, MVNOs, which are subsidiaries of SKT, KT and LG U+, will not be able to use such catchphrases as “official retailer” of a major mobile carrier that could confuse consumers.

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