Gov’t to bring LTE’s speed to thrift phone market

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Gov’t to bring LTE’s speed to thrift phone market

The government yesterday laid out plans to slash LTE phone bills through a thrifty phone service called altteul. The move by the government was made to prevent the three largest mobile carriers from dominating the altteul phone market.

Only a limited number of altteul phone carriers currently offer LTE monthly plans compatible with older LTE phone models. People actually had to buy new phones to subscribe to cheaper LTE plans, which defied the purpose of the thrift phone network: more affordable telecom services.

With new policies that take effect in July, any 3G or LTE smartphone customer of any mobile carrier can subscribe to an altteul phone carrier using their existing device. They can make the switch by purchasing a USIM chip sold at Korea Post branches and on its website. The number of post offices that sell the chips will be almost doubled to 240 locations nationwide by next month.

The policy package unveiled yesterday by the Ministry of Science, ICT and Future Planning is targeted at attracting LTE smartphone users to small and midsize thrifty phone operators in the hope they will get a larger share of the nation’s telecom market.

The policy package ordered the thrift phone operators to roll out more than 40 additional smartphone monthly plans by next month that are up to 50 percent cheaper than similar plans offered by the three mobile giants. The average LTE subscriber will save up to 100,000 won ($98) on cellphone bills every year, the ICT Ministry predicted.

The new plans do not charge registration and contract cancellation fees at the beginning or end of service subscriptions.

For example, if someone is currently on a KT LTE plan that provides 200 minutes of voice calling and 1.5 gigabytes of data usage for the flat monthly fee of 42,000 won, an identical service will be offered for only 21,000 won by CJ HelloVision.

Thrifty phone carriers offer the same quality of service as the three mobile giants because they rent out parts of the giants’ voice and data networks.

Among the eight thrift carriers, two work with SK Telecom, five with KT and one with LG U+.

In a bid to make people’s phone bills lighter, the ICT Ministry ordered the three mobile giants to cut down the network rental fees charged to the thrift carriers. This will result in thrift phone customers getting a 64 percent discount every minute for voice calls and an 81 percent discount for every megabyte of 3G or LTE data usage.

The ministry also said it will restrict three thrift phone carriers that are affiliates of the three mobile carriers from taking more than 50 percent of the thrift phone total market share. The measure is intended to promote more competition in the market. The ministry also prohibited the big mobile giants from renting out voice and data networks to their own subsidiaries at lower rates than to independent thrift phone operators.

According to the ministry, there are 3.3 million thrift phone users, only 6 percent of the entire mobile telecom market. More than 90 percent of them are subscribers to 2G and 3G services.

“We hope to bring the altteul phone market up to 15 percent of the entire mobile market,” said Kim Joon-mo, director general at the ministry. “Introducing attractive LTE plans will help because almost two-thirds of Koreans are LTE smartphone users.”

BY kim ji-yoon []

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