SK Telecom to Cut Mobile Fees

SK Telecom announced that it will cut mobile call rate for its 22 million subscribers by 50 percent starting from October 1, and also lower the price of text messages from the current 30 won to 20 won from next January. The leading telecom company also said that within this year, it will offer a lower flat rate basic charge (9,900 won a month) for people who do not use mobile phones much.

The Ministry of Information and Communication (MIC) and SK Telecom announced the new price reduction plan on September 19. MIC Minister Yoo Yeong-hwan said in a press briefing that, “The plan has been made to provide benefits to social minorities, including seniors, through a consultation with the government.”

SK Telecom, which should get permission from the MIC to change its rates, said that it will offer a 50 percent discount on calls between SK Telecom subscribers if they pay additional 2,500 won a month. Furthermore, it will provide teenagers with a fixed rate which includes mobile data services charges.

However, as SK Telecom subscribers have to pay an additional 2,500 won a month for the new reduction plan, customers who use less than one hour per month are not expected to benefit from it.

KTF and LG Telecom, rivals of SK Telecom, strongly opposed SK’s new rate plan, saying, “Due to the rate discount, SK Telecom will dominate the mobile market.” However, it is reported that KTF and LG Telecom are also considering the introduction of discount systems, hinting that competition among mobile carriers to lower rates will be fiercer.

Jeon Eung-hwi at Green Consumers Network, a civic group, pointed out that, “The new scheme cannot be seen as a plan that consumers can actually feel.”

Some said that the price reduction plan is aimed at attracting voters in the upcoming presidential election since it was initiated by a recent request of Cheong Wa Dae.

Because right after a presidential spokesman on September 4 announced the need for a discounted rate in an open briefing, an MIC official directly asked SK Telecom for some price reduction plans.

A senior official from the telecommunications industry complained saying, “I really don’t know which government agency is responsible for mobile fee-related issues.”

nex@donga.com imsun@donga.com