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South Korean mobile firms slash tariffs

The South Korean telecom regulator said on Sunday the country's three mobile service providers would lower mobile tariffs and other charges under a government initiative aimed at supporting households.

india Updated: Sep 27, 2009 11:00 IST

The South Korean telecom regulator said on Sunday the country's three mobile service providers would lower mobile tariffs and other charges under a government initiative aimed at supporting households.

Savings from the cuts would amount to 1.5 trillion won ($1.25 billion) in 2010, equivalent to 7-8 percent of combined revenue of the operators -- SK Telecom, KT Corp and LG Telecom.

Those mobile tariff savings would reach 2.1 trillion won in 2011, or about 10 percent of the combined revenue, the Korea Communications Commission said.

In the country where 97 percent of the population has a mobile phone, the government has been encouraging operators to lower rates to lessen the public's burden from growing spending on communication services.

"We retain our principle that a reduction in telecom service fees has to be made voluntarily," said Shin Yong-sup, the commission's director general for telecommunication policy.

"However, it is necessary to guide companies to re-direct excessive spending on marketing to tariff cuts or investment in content," Shin told reporters.

Telecom companies offer discounts through long-term contracts and bundled products, but have until now refrained from uniform tariff cuts.

Under the Sunday's announcement, operators will lower charges for new subscribers and introduce discounts for long-term users, while slashing charges for mobile data services, according to the KCC.

Market leader SK Telecom will also introduce a new rate system under which a call will be charged second-by-second, rather than by every 10 seconds currently.

Most of the tariff cuts will take effect in November and some by March next year, the KCC said.