Cheap data roaming services offered next year

Data roaming service, a pricey hot potato for travelers heading abroad, will come at an affordable price even for thrifty phone users beginning next year.

The Ministry of Science, ICT and Future Planning (MSIP) announced on Thursday that subscribers of mobile virtual network operators (MVNOs), more known as thrifty phone providers, will also be able to take advantage of the “one day unlimited data roaming” service. The charge for the service will be at 9,000 ($7.64) to 10,000 won a day.

MVNOs are smaller vendors who offer telecom services at cheaper monthly phone bills by renting network spaces from the nation’s three big mobile network operators (MNOs) -- SK Telecom, KT and LG U+.

Until now, most MVNOs didn’t offer such data roaming services like the big three telecommunications providers, due to difficulties in directly cooperating with overseas mobile carriers. Even if roaming services were provided, the price was costly at about 120,000 won a day.

However, unlimited data roaming service is soon to be released even for thrifty phone users.

“It was hard to set the price for the unlimited data roaming service plan since it is a product recording deficits for the major three players in the market as well,” said an official from the MSIP. “However the consultation for setting the wholesale price for roaming service between the MVNOs and MNOs went well and we expect to see the service operation from next year.”

Following the solutions provided for the thrifty phone users, brighter prospects are forecasted for the MVNO business, once were disregarded as cheap service for older people. Limitation on offering monthly bill pre-paying products for LTE smartphone devices has been another issue with the thrifty phones, but it was also figured recently. With bigger presence of MVNOs in the market, new business models targeting this niche segment is being introduced.

Security companies such as S-1 Corporation and KT telecop and Korea Information & Communications Corporation (KICC), a mobile payment service provider are already utilizing thrifty phones to enhance their Internet of Things (IoT) sector. From the first half of next year, nation’s No.1 navigation service provider FineDigital will also join the move and offer vehicle controlling services via MVNO’s thrifty phones.

MVNOs first entered the mobile telecommunications market in July of 2011, however they now possess 5,848,000 subscribers according to accumulated data until last month. The number suggests average of 134,000 subscribers have been added every month after the operators’ entry. The number of MVNO subscribers account for about 10 percent of the total mobile phone users.

There are total 38 MVNOs in business including SKTelink. Their sales revenue up to this year’s third quarter amounted to 490.8 billion won, surpassing last year’s combined revenue of 455.5 billion won.

According to the ministry, thrifty phone users slash their monthly phone bills by 20,455 won monthly, compared subscribers of lager mobile carriers, which adds up to an yearly saving of roughly 240,000 won.

BY JEON YOUNG-SEON [kim.jeehee@joongang.co.kr]