Caller identification service free, but cost seems deferred

Following in the footsteps of market leader SK Telecom Co., the other two mobile phone operators ― KTF Co. and LG Telecom Inc. ― have decided to implement a new rate system that provides caller identification at no additional cost. The Ministry of Information and Communication said yesterday that KTF and LG would introduce the revised rate systems next month. In return for providing free caller ID service, the new systems will charge higher monthly rates, according to the ministry. The companies said that revision to the rate system would inevitably lead to a rise in basic charges, which experts compare to urinating on frozen feet ― it only provides temporary relief. The new rate system will apply to all new subscribers. Existing subscribers wishing to receive free caller ID service will have to make a request to the company. Currently, KTF subscribers pay 1,000 won and LG users 2,000 ($2) per month for the service, while their monthly basic charges are 13,000 won and 12,000 won, respectively. A number of consumer groups and subscribers have been pushing wireless carriers to scrap or reduce rates for the caller ID service, arguing that it does not cost the companies anything extra. The nation’s top operator, SK Telecom Co., started to provide a free-of-charge caller ID service this month. However, LG and KTF have been reluctant to follow suit because the charges have been an important source of earnings. Income from the service accounted for 68 percent of total operating profit last year at LG Telecom, 8.1 percent at SK Telecom and 14.8 percent at KTF. KTF earns almost 95 billion won solely from the service. When LG Telecom scraps the 2,000 won monthly charges for its caller ID service, it is forecast to lose 110 billion won in annual revenue. The company has claimed that abolishing the fee would lead to a drop in sales at a time when market conditions are worsening for the industry’s smallest player. by Seo Ji-eun