KB Kookmin Bank gets approval to continue mobile communications biz

The Korea Times

The Korea Times

Finance

Tue, September 26, 2023 | 09:00

Companies

KB Kookmin Bank gets approval to continue mobile communications biz

Posted : 2023-04-12 16:44

Updated : 2023-04-12 17:42

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FSC to revise rules for KB's MVNO business

By Anna J. Park

KB Kookmin Bank's mobile virtual network operator (MVNO) service, Liiv M, has officially obtained government approval to continue business in Korea. MVNO operators refer to those who provide wireless communications services to customers, without owning the wireless network infrastructure.

With the official permission granted by the Financial Services Commission (FSC) ― the country's top financial regulator ― on Wednesday afternoon, KB Kookmin Bank will now be able to provide services with more stability.

"FSC's innovative finance committee accepted KB Kookmin Bank's requests to revise relevant regulations (so that the bank can continue providing MVNO service to customers), following the committee's comprehensive evaluations on the need for the revision, financial markets' stability and impacts on consumer protection," the FSC said on Wednesday.

The top financial regulator said it would take moves to revise related laws, once KB Kookmin Bank completes registering its business area as a financial-communication convergence service.

Liiv M was first launched in April 2019, as an innovative pilot program selected by the FSC. The FSC designated a few pilot programs set forth by local banks, aiming to bring innovation into the country's banking sector. The selected programs explored new business opportunities in non-financial sectors outside of the traditional banking area, as they were exceptions to the country's decades-long rule prohibiting banks from making a foray into non-financial sectors.

Through the years of the pilot program operation, Liiv M has attracted over 420,000 subscribers as of March this year, thanks mainly to its cheaper mobile communications price. The subscription number is the highest among local MVNO providers, except those run by major mobile carriers' subsidiaries, such as SK Telink, KT M Mobile, KT SkyLife, MediaLog and LG HelloVision.

Still, Liiv M's market share is only about 5 percent of the MVNO market; the subsidiaries of major mobile carriers account for over 50 percent of the MVNO market. Against the backdrop, the FSC's committee on innovation evaluated that Liiv M contributed to the increase of consumer benefits, by lowering household phone bills and by bringing competition into the local mobile carriers' market.

While KB Kookmin Bank is vowing to provide a new type of quality customer service combining the areas of finance and communications, other banks might also consider hopping into the new business area, seeing KB's success case.

But market watchers think their official entry into the market may take time, given the complications of the existing legal framework. Currently, Toss Mobile, Viva Republica's communications subsidiary, has entered the MVNO market, while other banks like Shinhan and Hana are operating phone bill partnerships with local MVNOs.

annajpark@koreatimes.co.kr