Mobile carriers to cut registration fee by 50%

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Mobile carriers to cut registration fee by 50%

Korea’s three largest mobile carriers will cut their service registration fees by 50 percent starting tomorrow in line with the government’s efforts to reduce people’s hefty phone bills.

The charge for new subscribers will be 10,800 won ($10.63) for SK Telecom, 7,200 won for KT and 9,000 won for LG U+.

This is the second registration fee drop for the carriers after a 40 percent discount last year. The fee will be eliminated by next August.

“We will keep introducing customer-friendly and economic telecom plans that are geared toward the government’s plan to reduce household phone bills announced in June,” the telecoms said yesterday in a statement.

SK Telecom predicted that the lower fee will reduce its customers’ bills by about 70 billion won per year, while KT predicted 30 billion won in savings for its users.

The actions are part of the Ministry of Science, ICT and Future Planning’s policy to lower people’s overall financial burden, starting with their phone bills.

According to a study by Statistics Korea, Korean households spent an average of 159,400 won per month on telecom bills in the first quarter of this year, up 5.5 percent compared to the same period last year.

The Korea Communications Commission said yesterday that it would fine mobile carriers more heavily if they give excessive subsidies to customers who buy new phones. The mobile device distribution act, which takes effect in October, will fine the carriers up to 2 percent of their annual sales.

The government hopes this will eventually have a positive impact on consumers because mobile carriers lure people into buying new phones by giving out excessive subsidies, usually on high-end models. This leads people to buy new phones more often as new models are released, which adds to their phone bills.

According to a survey in January by the Green Consumer Network in Korea, 35.7 percent of the average customer’s phone bill was spent on monthly installments for smartphone devices, followed by 30 percent for data network plans and 25 percent on voice calls.

The fines that will be handed to the telecoms will vary depending on the severity of the violation. Companies that post a fake subsidy rate or do not post one will be fined 2 percent of their annual sales. Violations such as collusion between mobile carriers and a shop to post a fake price are subject to a fine worth 1 percent of sales.

The measure is aimed at reducing subsidies offered by mobile carriers. Currently, the three companies illegally give higher subsidies than the ones permitted under the new act, which only allows discounts between 250,000 won and 270,000 won.


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