Cell phone Internet fees to be slashed

With the upcoming launch of Apple’s iPhone and the general trend toward wireless Internet services, Korea’s telecommunications regulator is expected to lower the price of such services on mobile devices by the end of this year.

Earlier this week, the Korea Communications Commission announced that it will cut mobile phone rates by 20 percent by next year. “We will be able to announce more details of the price cut around the Chuseok holidays,” said Choi See-joong, chairman of the KCC, during a National Assembly telecommunications committee meeting.

The main focus in the KCC’s cutting of mobile phone and wireless Internet service fees will involve banning mobile phone subsidies in exchange for cheaper rates and pushing operators to expand their payment plans to include reasonable payment packages for smart phones.

Also, the KCC plans to introduce mobile virtual network operators in which non-telecom companies will be able to provide their own wireless services by borrowing bandwidth from mobile carriers.

“We are looking into a dramatic price cut for wireless Internet services for mobile phones,” said an official at KT upon the announcement that the company will launch the long-awaited iPhone in Korea by next month or November. The KCC on Wednesday announced that it will allow the sale of iPhones in Korea, after making an exception to the law that requires mobile phones sold here to use only domestic location-based technology.

As one of the iPhone’s most popular features is its wireless Internet capabilities, the global hit phone’s launch in Korea is expected to boost demand for wireless Internet services on handsets.

Although Korea is one of the world’s most wired countries, wireless Internet services have not had a great influence here because of their high costs. In a recent report by the Organization for Economic Cooperation and Development, Korea’s mobile phone fees were the highest of 15 countries, including the U.S., Australia, the U.K. and Canada.

According to the KCC, only 17.4 percent of telecom payments in Korea last year were for wireless Internet services. Compared to other countries with similar wireless penetration, Korea’s wireless Internet usage on mobile devices was small.

Around 41 percent of telecom payments in Japan were wireless Internet fees. Australia and the U.K. saw 32 percent and 28 percent of their telecom payments comprised of wireless Internet fees, respectively.

By Cho Jae-eun [jainnie@joongang.co.kr]