Ministry says mobile act has reduced mobile costs

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Ministry says mobile act has reduced mobile costs

The Ministry of Science, ICT and Future Planning said that in the 100 days since the mobile act to reduce communications costs and promote fair competition was implemented, there have been positive outcomes for consumers.

But customers have complained that the government’s move is suppressing a free market system in which the latest smartphones come with bigger subsidies.

“Discrimination in the amount of subsidies has been eradicated and more consumers purchased new phones without having to subscribe to expensive monthly plans to receive more subsidies in return,” said a spokesman for the Ministry of Science, ICT and Future Planning.

According to statistics released by the ministry on Tuesday, smartphone subscriptions rose from a daily average of 36,935 in October to 60,570 in December.

The government cited carriers and manufacturers’ fixed subsidies as well as their efforts to lower the price of devices as the main reasons for the increased subscriptions. The ministry added that subscriptions to expensive monthly plans have shrunk.

Before the mobile act took effect, 33.9 percent of smartphone subscribers were on monthly plans that cost more than 60,000 won (about $50), but in December, that portion dropped to 14.8 percent.

The subscription rate for mid- to low-cost monthly plans, which was 66.1 percent before the law was implemented in October, rose to 85.2 percent in December.

The government interpreted these figures as proof that the mobile communications market is stabilizing after consumer sentiment declined immediately when the law was implemented.

However, consumers are still complaining, saying they do not benefit from the new regulation.

More people are subscribing to mid- to low-cost monthly plans because the amount of subsidies offered by mobile carriers or retailers has dropped to less than 300,000 won, in accordance with the law.

Consumers have dealt with the low subsidies by buying cheaper plans, but household communications expenses remain the same, they say.

Mobile carriers are still giving out subsidies above the ceiling, but only on smartphones launched 15 months ago, in accordance with the law.

“Even if I choose an old model that was launched over a year ago, I can receive the maximum amount of subsidies only if I subscribe to a monthly plan that costs around 100,000 won or more,” said a 27-year-old consumer surnamed Lee.

Some said that the main purpose of the law - to eradicate discrimination in subsidies - also failed.

“There are still many mobile carriers in the black market offering excessive subsidies to lure consumers to expensive monthly plans. I still get phone calls or text messages saying they will offer the iPhone 6 for free,” Lee said.

BY KIM JUNG-YOON [kjy@joongang.co.kr]
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