تجزیه و تحلیل اقتصادی از معرفی سیستم MVNO و مفاهیم اصلی آن برای تصمیم گیری های بهینه سیاست در کره

This study analyzes the anticipated economic effects arising from the introduction of the mobile virtual network operator (MVNO) system in the mobile communications service market. For the analysis, actual data (or estimated data)—such as price elasticity, the number of subscribers, traffic volume, rate, and access charge—were combined with an assumption about a competition scenario in the future market. Based on this analysis, consumer surplus, and change in the service provider's profits were estimated according to the type of policy that may be adopted for the MVNO system by the regulator. The results of the analysis indicate that consumer surplus appears to increase largely because of the reduction of the mobile service rate by the promotion of “service-based competition,” which occurs upon adoption of an MVNO policy in the mobile communication service market. Moreover, the introduction of an MVNO system into the mobile communication market seems to be socially beneficial regardless of policy type if access charges are set reasonably by a cost-plus or retail-minus method. In particular, in order to make sense of the introduction of a special MVNO, whether by the cost-plus method or the retail-minus method, the correct discount rate must be used in setting an access charge between the special MVNO and the significant market power (SMP) mobile network operator (MNO).

On 25 July 2003, the Ministry of Information and Communications (MIC), a Korean telecommunication regulatory agency, adopted the service-based competition (SBC) policy in order to promote effective competition in the communications service market. Fixed network operators (hereafter referred to as FNOs) such as Korea Telecom, Hanaro Telecom, Dacom, and Onse Telecom have shown considerable interest in the mobile virtual network operator (MVNO) policy, which is still being reviewed by the regulator even at time of writing (February 2007). The purpose of the review is to increase competition among service providers, to enhance consumer benefit, and to expand the wireless Internet market through the provision of the mobile communication service using the MNO frequency. Reviewing the case of the UK, which has an advanced communication regulation policy, Oftel (1999a) and Oftel (1999b) announced directives concerning MVNOs in October 1999. Thereafter, FNOs—including One.Tel, BT, Kingston Communications, and Energis—entered the mobile communications service market to complement their fixed-line service, provide a convergence service for the enterprise customer, and supplement the broadband fixed network service. In particular, One.Tel began to provide the mobile communication service with a discounted monthly basic charge and a discounted call charge1 that were 60% and 20% lower than the respective Vodafone charges from November 2001, using the BT Cellnet (now, mmO2) network. However, BT purchased the network capacity from BT Cellnet in October 2002 and entered the mobile communication market using the brand name of “Mobile Sense,” with a discounted monthly basic charge and call charge that were 20% lower than those of Vodafone (BT, 2003). The successful entry of FNOs into the UK mobile communication market was the result of several factors, including the policy support of the regulatory agency Oftel (now Ofcom), FNOs’ service supplementation, successful MVNO implementation of noncommunication operators such as Virgin Mobile,2 and positive profit forecasting by the market research firm Ovum (2000). Ovum (2005) announced the relatively optimistic forecast that 10.9% of all mobile communication service subscribers in the UK looked set to subscribe to MVNOs in 2006, whereas 23.7% were predicted to subscribe to MVNOs in Denmark.3 It is considered that estimating the economic effects of the MVNO policy beforehand and deducing reasonable and rational policy implications from the analysis are important for future decision-making aimed at maximizing the positive effect of the adoption of an MVNO system, while the entry of FNOs into the mobile communication market through MVNOs is being realized in the domestic as well as the overseas market. Accordingly, this study analyzes the economic effects of MVNO adoption from the viewpoint of both the consumer and the service provider on the assumption that the MVNO system will be fully adopted by Korea in the end of 2007. Until now, related studies have focused on analysis of the economic effects caused by the expansion of the mobile communication market by MNOs. To analyze the economic effects on the mobile communication market, Hausman (1997) estimated the level of consumer benefit using mobile communication market data from the US for the period 1989–1993, while the ACA (2001) in Australia measured and announced a change in consumer benefit in the mobile communication service from 1995 to 2000. In Korea, Lee, Kwon, and Lee (2002a), Lee, Moon, Kim, Park, and Yoon (2002b), and Kim, Lee, and Kim (2003) estimated the price elasticity of the mobile communication market demand using amount of revenue and survey and call volume data, and calculated the consumer surplus using the consumer surplus estimation method of Alexander, Kern, and Neil (2000).4 However, the analytical results of previous studies did not reflect reality, because the latest call traffic volume and call amount data of individual service providers could not be utilized due to the limitations of the relevant data. Furthermore, no study has estimated either price elasticity or consumer surplus using call volume data.5 In particular, there have been virtually no studies of technical interconnection systems or any cost-effectiveness analyses that reflect access charges with regard to the introduction of the new MVNO policy. This study presents a desirable and rational direction for MVNO policy, derived from the estimation and comparison of consumer convenience and service provider profitability in consideration of various market development scenarios following MVNO policy adoption, while estimating consumer surplus based on the latest call volume data of individual service providers. This study is also an attempt to enhance the reality of the analysis as well as the validity of the policy implications by estimating changes in revenue, cost, and profit by service provider in consideration of the technical interconnection relations between operators. Additionally, the complex technical interconnection system between operators, as well as changes in profit and cost items, will be reflected in the analysis. Through this analysis, the revenue, cost, and profit change of each operator will be estimated in order to enhance the applicability of the study results and the validity of the policy implications.

All MNOs are defined as obligatory service providers in the UK, Hong Kong, Japan, and Sweden, whereas only an MNO with an SMP is defined as an obligatory service provider in Denmark. Additionally, countries like Denmark and the Special Administrative Region of Hong Kong mandate the cost-plus method for network usage fee payment, whereas the UK and Sweden use the retail-minus payment method. In particular, the UK regulator decided an explicit policy that mandates BT Cellnet to use the “retail price × discount rate−termination access fee” method as the price for network usage. A review of the MVNO business status in these countries shows that FNOs and noncommunication service providers are entering the market with 20% and 30% discounted call charges, respectively, compared with the MNO's call charge. As has been done in these countries, this study analyzed the economic effects of MVNO policy adoption by using actual data of the mobile telephony market (call traffic estimation based on the current number of subscribers and the call traffic rate of each service provider, and the fixed/wireless access fee) and by reflecting the technical access relation between service providers. The significance of this study includes the following features. (1) Mobile telephony price elasticity and the change in consumer surplus by MVNO policy adoption was estimated using practical call traffic of a mobile network. (2) An MVNO profit/cost model was established mathematically, considering the technical interconnection path of mobile calls among MNOs, MVNOs, and FNOs. (3) A future policy direction was proposed regarding which type of MVNO policy is desirable when both consumer surplus and the service provider's profit are considered, and the necessity for prestudy with regard to several policy issues that should be accompanied by policy adoption was also proposed. From the results of this analysis, it is demonstrated that competition must be promoted by adopting the MVNO policy, since consumer surplus is significant regardless of the MVNO type adopted. It is also ascertained that introduction of the core MVNO policy will sufficiently contribute to the promotion of fair competition by securing the profits of the new service provider. Furthermore, the basic charge and call charge profits will all be positive if the obligation to open the network is imposed on the SMP only and the cost-plus method is applied. However, it seems that the definition of recommended retail price (standard price or weight averaged price) and the scope of discount rate (weight averaged or late starters) will be quite critical to the applicability of the retail-minus method (in order to achieve the policy objectives of fair competition promotion) if the special MVNO is adopted. The estimation results of this study are suggestive of the following policy recommendations. First, it seems desirable for society to introduce an MVNO system into the mobile communications market and pay access charges for using an MNO's network calculated by cost-plus or retail-minus methods. In particular, the results showed positive net revenue from call charges for core MVNOs if the provision obligation is limited to the SMP only and the cost-plus method is employed. Secondly, the policy should be improved so that the arrangement between the special type 1 MVNOs and SMP MNOs can be calculated by the cost-plus method so that the new service provider may obtain an appropriate profit, or a policy should be established that ensures an appropriate discount rate through the retail-minus method in order to make the introduction of the special MVNO meaningful. Therefore, a clear calculation method for network usage should be proposed when the special MVNO is adopted or when the special service provider policy is improved. Finally, the regulatory agencies of the major advanced countries have not defined MVNOs, or set the type, nor have they decided on the obligatory service provider and network usage fee based on the quantitative index of the economic effects on consumers and service providers of a service-based competition policy in the mobile communication market. This study can be utilized as useful data for those regulatory agencies that are trying to minimize the uncertainty caused by MVNO policy adoption in the communication service market.