The Korean mobile service market has persistently grown with the number of subscribers and volume of mobile traffic. It shows the slow diffusion of 5G subscribers, and rapid growth of both the MVNO(Mobile Virtual Network Operator) market and unlocked mobile phones. Therefore, this study derives the direction of telcos’ strategies and policy implications by empirically analyzing the usage and attitude of LTE and 5G subscribers. Our major findings are as follows: First, our current mobile service subscription market constitutes most long-term customers for their incumbent carriers only by device change from lock-in with bundle services. Mobile tariffs, data speed, and benefits of bundle services are important factors affecting choices and customers’ satisfaction with a provider and intentions of churning to another. Second, demand and satisfaction for using 5G are less because speeds and service tariffs act as pain points for 5G services. Third, the users’ high preferences for MVNOs and unlocked mobile phones are linked to their subscription to MVNOs’ low-cost plans with unlocked mobile phones on online channels. These streams lead to a big change in the market competition that MNO(Mobile Network Operator)s’ market shares are expected to decrease and MVNOs’ shares will be increased by two times, in the near future. Therefore, MNOs need to change their distribution strategies from offline to online channels and try to resolve the stereotype, “mobile tariffs are expensive,” by enhancing their service values. Finally, as consumers prefer one-stop service in the same channel regardless of the distribution channel, policies should focus on the consumers’ needs for convenience rather than on the channel separation for perfectly unlocked mobile phones.
KSP Keywords
Distribution channel, Distribution strategy, Low-cost, Market competition, Mobile Network Operator(MNO), Mobile services, Mobile traffic, Mobile virtual network operator(MVNOs), Number of subscribers, Policy implications, Service market
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