Govt. pushes for further discounts of mobile fees

The government will begin expanding the mandatory discount of mobile phone fees starting next month, the ICT ministry said Friday, amid fierce opposition from local mobile operators.

The discount rate of monthly mobile phone rates provided by the country's leading telecoms firms -- SK Telecom Co., KT Corp. and LG Uplus Corp. -- will be raised from the current 20 percent to 25 percent starting Sept. 15, according to the Ministry of Science and ICT.

The decision to increase the discount rate -- which the firms have been notified of earlier in the day -- would allow about 19 million subscribers to receive a combined 1 trillion won ($980 million) in discounts every year in the future, the ministry said. 

The discount is normally offered to subscribers of a two-year contract pay plan if they opt not to receive a handset subsidy. Accordingly, a monthly pay plan worth 40,000 won will have an additional 2,000 won discount, and new subscribers will receive an additional 10,000 won discount.

The new discount scheme, however, will only be offered to new subscribers, as the notification does not have any mandatory clause on those who are already subscribed.

The latest measure faces strong opposition from the three mobile carriers as they claim that the decision would drastically worsen their profitability, with some hinting at possible legal actions.

The cost for telecommunication services in South Korea has been cited as one of the big burdens for South Koreans. Civic groups and some lawmakers have called on telecoms operators to reduce their mobile fees.

Earlier, President Moon Jae-in's policy advisory committee announced a package of measures on telecommunications fees, saying that it will encourage local mobile operators to expand the discount rate of mobile phone fees and offer an additional benefit to low-income customers.

During the presidential campaign, Moon vowed to reduce household communications expenses. (Yonhap)