Moon’s team promises lower phone bills for all

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Moon’s team promises lower phone bills for all

President Moon Jae-in’s transition committee on Thursday cleared the air on a controversial campaign pledge to lower monthly mobile phone bills, affirming that the administration will pursue a reduction of mobile service fees for all.

“We will abolish the basic fee for 2G and 3G mobile phone users and offer phone bill discounts for [4G and LTE] smartphone users,” said Lee Kai-ho, head of the transition committee’s economic team II during a phone interview with the JoongAng Ilbo.

While Moon had originally pledged to abolish the 11,000 won ($9.80) basic monthly fee for all cellular service subscribers, the plan puzzled the public because the basic fee only applies to 2G and 3G service. For LTE subscribers, mobile carriers offer separate phone plans that do not include a basic monthly fee.

“If we abolish the 11,000 won fee for 2G and 3G users and discount the overall fee for LTE subscribers, that means just about everyone in the nation can benefit from the pledge,” Lee said. “There is nothing that has changed from Moon’s original pledge.”

Lee’s remark is considered a confirmation of the government’s will to lower phone bills for everyone in Korea. On the campaign trail, Moon had said mobile service fees were unfairly burdening households.

There was some concern, though, that the administration might backtrack from the promise when another member of the transition committee, Choi Min-hee, said on Wednesday that discounts would only be given first to subscribers of 2G and 3G service.

Consumer rights groups feared this meant a dilution of Moon’s pledge. A majority of the country’s 55 million phone subscribers, about 85 percent, use 4G or LTE smartphones.

During the interview, Lee added the committee had requested the Ministry of Science, ICT and Future Planning come up with a plan to reduce overall household spending on mobile service. The ministry was scheduled to report to the committee on Friday, but the due date has been delayed to today. In lieu of the report, the committee decided to take suggestions from related interest groups, including consumer rights groups and mobile carriers.

On Wednesday, the ministry met with executives from Korea’s three major mobile carriers to discuss a plan to lower phone bills. The companies have been expressing their concern about the pledge. Abolishing the basic monthly fee, they said, would result in a combined annual loss of 7 trillion won, which is about double the combined operating profit of the three mobile carriers last year.

“Abolishing the basic monthly fee is a hot potato, but it is not likely because the government does not hold legal rights to make telecom companies do that,” Kim Hong-sik, an analyst at Hana Investment & Securities, said in a report Thursday. “An alternative to the ongoing controversy is likely to be a discount plan focused only on low-income households.”

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