Carriers tinker with how to bill

KT and LG U+ are looking into the possibility of overhauling how they charge customers after SK Telecom last week announced unlimited free calls and text messages for their subscribers.

“We’re looking into a billing system where on top of the free calls between subscribers, additional discounts will be offered of a combination of 10 options including IPTV, satellite channels and VoIP,” said a KT official.

Although KT comes second after SK Telecom in the mobile communication market with a share in the 30-percent range, it has an absolute dominance of the landline market.

Considering that strength, additional discounts from KT could have a huge response to match the free calls and text messages offered by SK Telecom.

LG U+ is looking into a billing system that would charge different rates for different types of data use in the first half of the year.

“Not all customers use the same data,” said Lee Sang-chul LG U+ Vice Chairman. “We think it is better to offer a wide variety of choices.”

Currently data use is billed in a single way, although there are different plans.

For example people who subscribe to KT’s LTE520 bill receives 2.5 gigabyte (GB) data with 75 Megabits per second (Mbps) speed every month while those who signed up for LTE620 receives 6 gigabyte data at the same speed.

LG U+’s new billing system will offer different speeds at different prices.

Customers who don’t need services that require speed such as internet surfing could ask for a more reasonable plan.

“Like people choosing whether to ride the KTX or the less speedy trains, we will be offering the opportunity for a customer to choose the quality and the amount of data,” Lee added. TeliaSonera, a Swedish telecommunication company, is offering a similar billing system.

KT and LG U+ are mulling the changes because SK Telecom’s free calls and text messages ? which will require an extra 3,000 won payment ? has been very popular.

In just three days, 200,000 customers have switched to the new billing system. Many are ditching KT and LG U+ to defect to SK Telecom.

The company currently has the leading market share exceeding 50 percent.

The two companies are also considering systems in which customers can choose whether to boost voice calls or data use to suit their phone habits.

Currently customers cannot choose the number of free calls or data size as they are under structured in packages. For example, under KT’s LTE520 package a subscriber gets 250 minutes of free calls, 250 free text messages and 2.5 gigabytes of data for a monthly payment of 52,000 won. Under the LTE620 package, the subscribers gets 350 minutes of free calls, 250 free text messages and 6 gigabyte of free data for 62,000 won.

A new bill system could allow the subscriber to decide between free calls and amounts of data.Young people who frequently connect to the internet to either search or watch videos on You Tube tends to run out of free data use while they have huge amount of free calls left unused by the end of the month.

“The U.S. telecommunication company Verizon since last year has been giving unlimited free calls and text messaging and have been charging on the size of the data,” said an industry official. “Soon the telecommunication companies here will be competing over billing systems rather than on subsidies on smartphones.”

The telecommunication companies late last year received a combined 12 billion won penalty and suspension of attracting new customers for violating the subsidies on smartphones that went into effect in January. The companies paid more than the legal 270,000 won subsidies during ferice competition to attract subscribers.

By Ko Ran, Lee Ho-jeong [ojlee82@joongang.co.kr]