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| Lee Seung-gun, founder and CEO of Viva Republica, the operator of Toss app, speaks during a press conference held in March 2019. Newsis |
By Anna J. Park
Toss acquired Merchant Korea, a mobile virtual network operator (MVNO) that provides wireless communication services to consumers at reduced retail prices.
The fintech app operator announced on Thursday that it signed a share purchase agreement with Merchant Korea to acquire a 100 percent stake in the firm.
Founded in 1998, Merchant Korea has been offering MVNO services, leasing wireless capacity from the country's three major telecommunication network operators at wholesale prices and reselling it to consumers at a marked-down price under its own "MyWorld" brand.
Following the acquisition, Toss aims to introduce a new search and subscription function into its fintech app to offer customers the best MVNO service plans. The firm says the new function should innovate and streamline the MVNO subscription process for consumers, while enabling them to cut down their telecommunications fees.
Around 70 MVNO businesses have been registered since 2011 when the service was launched in the country. As of last year, over 10 million people subscribe to MVNO wireless network plans.
"Just as Toss creates social benefits with its financial services that help consumers save time and costs, the mobile application also aims to contribute to removing the inconveniences of the MVNO subscription process as well as reducing telecommunication costs," an official at Toss said.
Despite an increase in the number of MVNO businesses since 2011, the average monthly telecommunication service spending by households decreased by only 10 percent last year compared to 2010.
The decrease is somewhat disappointing when compared with global peer countries. According to the Electronics and Telecommunications Research Institute (ETRI), the U.S. experienced a 61 percent cut during the five years following the adoption of the business model there, while the U.K. experienced a 45 percent fall and Denmark witnessed a 50 percent decline.
Meanwhile, Viva Republica ― the operator of Toss ― also announced Thursday that it had succeeded in attracting 300 billion won ($229 million) in investments.
The company's corporate value is estimated at 8.5 trillion won, which has increased slightly from the previous investment round held in June last year when the firm's value was assessed at 8.2 trillion won. The fintech firm explained that institutional investors view the super mobile app's growth potential highly. The investment deal is slated to be closed next month. Toss expects to turn a net profit with it by early next year.
