MNP begins to take effect

• Changes in mobile regulation aid competition
• MNP helps KTF and LG begin to gain ground on SKT, although it holds onto number one spot
• SKT given permission to cut interconnection rates in the latest stage of the government project

The South Korean government has revealed the latest part of its plan to improve competition in the country’s mobile market, giving dominant cellco SK Telecom (SKT) permission to reduce its interconnection rates to KRW31.81 per minute, a decrease of 22.4% on the previous rate of KRW41 per minute. Its rivals KT Freetel and LG Telecom will charge KRW47.66 per minute and KRW58.55 per minute respectively.

Although it has managed to hold on to its number one spot in the market, SKT began to lose customers to its two rivals at the start of 2004, when the government introduced mobile number portability (MNP), which enabled SKT subscribers to switch to other carriers without having to change numbers. During the first half of the year, the operator’s market share fell by over three percentage points to 52.11% (18.5 million customers) at the end of June, with KTF claiming 32.39% (11.5 million) and LG 15.49% (5.5 million).

On 1 July 2004 SKT was given the chance to win back some subscribers, when the government applied MNP legislation to KTF subscribers. Over 100,000 KTF customers switched to SKT in just seven days; MNP will be applied to LG Telecom in 2005.

Source: PriMetrica's GlobalComms Database