Has the MVNO boom peaked? First-quarter net subscriber additions halved

In the first quarter of this year, the net increase in Mobile Virtual Network Operator (MVNO) subscribers dropped to about half of last year’s level. The three major mobile carriers strengthened subsidies and number portability incentives, first by waiving early termination fees at KT Corporation (KT) in January, and then through preorders and the launch of the Samsung Galaxy S26 series in February and March. As a result, users were more likely to move between the major carriers rather than switch out to MVNOs.
■ Around 50,000 users switched in Q1
According to the telecommunications industry and the Korea Telecommunications Operators Association (KTOA) on the 5th, the number of subscribers who moved to MVNOs in the first quarter of this year was 50,706. This is roughly half the 106,423 who switched during the same period a year earlier.
In January, competition over subsidies intensified after KT’s early termination fees were waived. Data from so-called phone bargain shops show that during the waiver period, when buying popular models such as the Samsung Galaxy Z Flip 7 and iPhone 17, the combination of standard subsidies and sales incentives (rebates) pushed the effective subsidy above 1 million won. For some models, the total subsidy even exceeded the device price, allowing them to be purchased as so-called "minus phones" that were effectively sold at a negative price.
In March, the carriers quickly raised standard subsidies again with the launch of the Samsung Galaxy S26 series. When the Samsung Galaxy S25 was released in February last year, the standard subsidy (then called the posted subsidy) was initially set at around 250,000 won and was only raised to about 500,000 won in mid-March, roughly a month later. This time, the Samsung Galaxy S26 series also started with a 250,000 won standard subsidy at launch, but it was doubled to 500,000 won in about two weeks.
Even though new Samsung Galaxy flagship devices launched in both years, the pace of churn to MVNOs was clearly different. In February last year, when the Samsung Galaxy S25 series came out, 42,426 users moved to MVNOs. In contrast, in March this year, after the Samsung Galaxy S26 series launch, the number who switched to MVNOs shrank to around 8,320.
An industry official explained, "In recent months, factors such as the waiver of early termination fees have fueled visible benefit competition among carriers. This month, however, there were no such special factors, so carriers quickly raised subsidies to stimulate demand and lock in customers," adding, "This likely helped curb churn to MVNOs."
■ Repeal of the Mobile Device Distribution Improvement Act also played a role
Another factor was the repeal of the Mobile Device Distribution Improvement Act last July, which removed the cap on additional subsidies that had been limited to 15% of the standard subsidy. Previously, users could only receive additional subsidies if they chose the device subsidy instead of the 25% contract discount, but now they can receive additional subsidies even when they opt for the 25% discount. As a result, more consumers appear to be lowering their effective purchase price by buying through carriers and combining subsidies with contract discounts, rather than purchasing unlocked devices outright and using low-cost MVNO plans. While churn to MVNOs has slowed, the number portability market has become more active. In the first quarter of last year, number portability volumes ranged between 490,000 and 570,000. This January, driven by KT’s early termination fee waiver, the number of users porting their numbers surged to around 990,000, before easing back to about 520,000 in February.
In March, the launch of new devices such as the Samsung Galaxy S26 series pushed number portability back up to around 630,000. This far exceeds the roughly 570,000 recorded in February last year, when the release of the Samsung Galaxy S25 series was reported as the highest level in seven years.
An industry official said, "Even after the current wave of new device launches passes, if the carriers continue to strengthen low-cost plans, partnership benefits, and device subsidies at levels comparable to MVNOs, the scale of churn to MVNOs may not return to the high levels seen in the past."
kaya@fnnews.com Choi Hye-rim Reporter