Mobile companies dial up deals

Three domestic mobile companies are introducing competitive new price schemes.
LG TeleCom Ltd., the smallest mobile player in Korea, in April launched a new call rate system, which was unprecedented in cutting basic fees. In Korea, mobile call rates are comprised of two criteria -- flat monthly basic fees and time-based call rates. KT Freetel Co., the second largest mobile service operator, and SK Telecom Co., the largest player in the industry, recently joined LG and introduced new price systems. With more than three-fourths of the population subscribing to mobile services, it is hard to add new customers, thus the companies aim at increasing revenues by boosting the calling time of existing customers, industry experts said.
SK Telecom yesterday introduced new price systems. One of them is a price system under which subscribers pay 15,000 won ($12.50) additionally per month, and are awarded free calling hours up to 11 hours on top of the subscribers’ average usage time during March and April. The company allows customers to switch to the new price system by the end of this year. The service runs until next year.
In April, LG adopted an alternative price initiative, which took out charges for additional services, such as short messaging or wireless Internet access, from the basic flat fees. Those kinds of services offered in addition to calling services have customarily been included in the basic flat fees. LG’s basic fees now range from 9,000 won a month to 13,000 won a month, less expensive than SK Telecom and KT Freetel’s average 14,000 won.
The system was the result of a strategy that aimed at the niche market of those who do not usually send messages through mobile phones, industry experts said.
KT Freetel has a limited offer until July in which subscribers are given 50 minutes to 400 minutes a month over their average calling time from December 2002 to January 2003 if they pay from 2,000 won to 10,000 won a month in extra. The service is available until February 2004.
Experts recommend mobile users to thoroughly analyze the way that they use their mobile phones before switching to the newly introduced offers. A subscriber usually spends an unvarying amount of time on a mobile phone each month. Thus those who shift to new price schemes may end up paying more call rates while not fully using the extra hours.
But the new systems may work for those subscribers who expect their calling hours to greatly increase.
For example, when a call rate is 20 won per 10 seconds, 11 hours of calling will cost users 79,200 won.

by Yum Tae-jung