SK cell rivals call for delay in cutting caller ID fee

Korea’s two smaller mobile phone service providers are opposed to a larger rival’s plan to cut in half the fee for caller identification service this year. They said the price reduction should be postponed to early next year. Some consumer activists are not happy with the call for a delay in the fee reduction. “Caller identification service is a basic service and thus should be free,” a group of 20 civic groups said in a statement. “The proposal to cut the fee next year is deceptive.” SK Telecom, the leading mobile phone company, said Wednesday it would lower the fee to at most 1,000 won (85 cents) monthly, after the Ministry of Information and Communication and the civic groups asked for a reduction. KTF Co., the second largest, and LG TeleCom, the third, worry that their profitability would be hurt by the reduction. “A 10-percent cut in mobile phone charges is inevitable next year in any case, and if the caller ID fee were reduced this year, it would mean companies have to decrease mobile phone charges twice,” a KTF official moaned. Dongwon Securities Co. said if the fee were halved, SK Telecom’s operating profit would drop by 123.6 billion won, KTF’s would fall by 58.8 billion won and LG TeleCom’s would decrease by 12.2 billion won. SK Telecom said earlier that it invested 50.2 billion won to establish the service while it earned 120 billion won from the service last year and is expected to net about 200 billion won this year. The ministry usually recommends a drop in mobile phone charges when mobile phone service providers rake in large profits. This year, mobile phone service companies foresee a 30 percent increase in their profits compared with last year, and a decrease in mobile phone charges is likely to come late this year. KT Corp. and Hanaro Telecom Inc., both fixed-line telecommunication service providers, said they have not recovered their investments in setting up caller ID services; expect no fee cut there. by Choi Hyung-kyu