the country save up to total 4.63 trillion won ($4 billion) in annual mobile expenses.
According to the measures jointly announced by President Moon Jae-in’s advisory committee for state affairs, the ruling Minjoo Party, and the Ministry of Science, ICT and Future Planning, the monthly discount rate for a mobile phone subscription agreement will be upped from the current 20 percent to 25 percent, and the 11,000 won basic monthly subscription fee will be exempted for the elderly and low-income household members. The committee expects the total communications expenses that households would save per year would reach about 4.63 trillion won, allowing each of the 55.38 million mobile phone subscribers to the country`s major three mobiler carriers to spend around 83,600 won less every year. The monthly discount rate will be raised to 25 percent starting as early as in September after official notification by the ICT ministry. The discount is normally offered to mobile subscribers on their two-year contract plan if they opt not to receive handset subsidy. The advisory committee expects the increase in the discount rate would allow about 19 million subscribers to receive a combined 1 trillion won discount annually. A mobile subscriber with a monthly pay plan of 40,000 won, for example, is expected to save 2,000 won every month while a new subscriber 10,000 won.
The government’s plan also includes exempting the elderly from the basic monthly subscription fee of 11,000 won from November. Low-income household members will also receive an additional 11,000 won discount in their monthly mobile expenses. This plan alone will affect 3.29 million subscribers and save up to 517.3 billion won in communications fees in total annually.
President Moon Jae-in has vowed to abolish the basic subscription fee of 11,000 won for all mobile phone subscribers, a change that would eat away at earnings of the country’s mobile carriers. But as the latest exemption plan will be applied to a limited number of people, concerns over the country’s major mobile carriers’ operations were somewhat alleviated.
Following the news on Thursday, the country’s top mobile carrier SK Telecom’s shares jumped 3.34 percent, or 8,500 won, to close at 263,000 won, while shares of KT added 1.86 percent, or 600 won, to end at 32,800 won. LG Uplus stocks climbed 1.19 percent, or 200 won, to 17,000 won.
As part of mid- to long-term plans, the government will encourage mobile carriers to introduce a cheaper monthly payment plan, expand public wireless Internet, and ease entry regulation for the telecommunications industry, the advisory committee said.
A cheaper plan will offer 1 gigabyte of data and 200 voice calling minutes in a monthly fee that costs 20,000 won. The ICT ministry expects that once the industry’s leader SK Telecom Co. introduces a budget payment plan, other players will follow suit. The advisory committee forecast the cheaper plan would help reduce monthly long term evolution (LTE) payment by more than 10,000 won for each subscriber - or up to 2.2 trillion won in total annually.
The government also plans to gradually expand public wi-fi within its budget from next year by aiming to set up free Internet service in 200,000 locations including buses and schools.
