Mobile telecoms roll out subsidies

Korea’s three mobile service providers yesterday announced handset subsidies ranging from 50,000 won to 210,000 ($51 to $215) won for subscribers who have used a particular carrier for at least 18 months. The size of subsidies varies depending on the average monthly charges a subscriber has paid over the past six months and how long they have been a subscriber (see chart on left). Of the nation’s 38 million mobile phone users, 62 percent, or 25 million customers, will be eligible. For SK Telecom Co., 13.86 million customers qualify for subsidies, while 6.96 million and 6.55 million qualify at KTF Co. and LG Telecom Inc., respectively. The government officially eased a ban on handset subsidies yesterday. They had been outlawed three years ago for causing overheated competition in the mobile market. The three mobile carriers ― SK Telecom, KTF and LG Telecom ― submitted their revised subsidy offers to the Ministry of Information and Communication yesterday morning. Under the new terms of use, market leader SK Telecom is granting subsidies ranging from 70,000 won to 190,000 won. Second-tier KTF will provide subsidies ranging from 60,000 won and 200,000 won, while LG Telecom will offer an amount between 50,000 won and 210,000 won. Mobile carriers had previously been expected to offer both direct discounts and provide coupons for free phone calls. However, according to the sales team at SK, the three firms will probably just offer discounts because coupons can be transferred to third parties. “We will continue to improve the market structure in a way that enhances the quality of service for existing customers rather than expanding our customer base,” said Kim Sun-jung, head of the sales department at SK Telecom, at the press briefing at the Ministry of Information yesterday. Park Sang-hoo, head of the sales policy team at LG Telecom, said, “The new subsidy policy aims to enhance fairness in the mobile market. We hope this can spur service competition among the three carriers.” His company would take strict action against attempts to offer illegal subsidies, he added. The subsidies may be adjusted during a one-month grace period that ends on April 26, after which the subsidy size and terms of use must be maintained for at least one year. Customers who change their mobile service provider through the number portability system can receive subsidies from the carrier of their choice. For example, someone who has subscribed to SK Telecom service for over five years and racked up a phone bill of at least 70,000 won a month on average over the past six months, would receive a 200,000 subsidy for migrating to KTF. Holders of more than one phone number can receive subsidies for each number. The subsidies will be allowed for qualified clients only once within the next two years. To check the exact amount of subsidies they can receive, users may log onto www.e-station.com for SK Telecom; www.ktfmembers.com for KTF; and www.mylgt.com for LG. The inquiries can also be made by calling customer service centers at each carrier. by Seo Ji-eun