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More choices for cell phone users

Published: 22 Aug. 2012, 21:26

It has been less than three years since Koreans joined the global frenzy over smartphone innovation, but the multifunctional mobile phones have more or less become indispensable here. Over 30 million, or around 60 percent of the country’s 50 million citizens, use smartphones for voice calls, messaging and Internet connections.

Life has come under our fingertips, but at a cost. According to the Statistics Korea’s recent survey on household spending, communication expenditures averaged 154,360 won ($135) per household in the second quarter, up 9.3 percent from the same period a year earlier. It posted the steepest growth among 12 categories of household spending. The government and politicians now have another major consumer burden to worry about - mobile communication fees that take up the biggest chunk of family expenditures after food and education.

One option would be the mobile virtual network operator (MVNO) wireless communications services that use network services of traditional licensed operators instead of owning and running their own infrastructure. They pay wholesale fees to offer mobile services at much cheaper rates. For the same SK Telecom mobile services offered now, for instance, a consumer could save as much as 20 percent. The model is widespread in the United States and Britain with the market rate at 8.4 percent and 12.6 percent, respectively.

The services were introduced here only two years ago and take up a mere 1 percent of the mobile services market. The country’s traditional mobile carriers SKT, KT, and LG U+ feared proliferation of the wholesale networks could hurt their businesses. As a result, just 10 percent of smartphone users are aware such services exist in the local market.

But to enhance competition and widen consumer choice in the mobile phone industry, we need a variety of business models. The MVNO services in the American and European markets have helped consumers there save on mobile phone use. Sensing business opportunity, large retail companies are jumping into the wholesale mobile communication market.

Authorities should also widen retail venues and channels for consumers to buy phones without going through mobile carriers. Especially as people can no longer get by without a cell phone, they should have the choice of finding affordable phones at fair rates.