Plan to cut phone bills sees progress

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Plan to cut phone bills sees progress

The Ministry of Science, ICT and Future Planning on Monday submitted another report to President Moon Jae-in’s transition committee on the possibility of lowering phone bills for cellular service subscribers.

It is the fourth official briefing made by the ministry on the subject.

“There are many eyes looking at whether telecommunication fees are set at a rational level under the new Moon administration,” Lee Kai-ho, head of the transition committee’s economic team II, said before the ministry’s briefing. “We will organize our plans based on things to do immediately, things to do next year and the time after that.”

One of Moon’s promises on the campaign trail was to abolish the 11,000 won ($9.80) basic monthly fee for all cellular service subscribers, but the plan puzzled the public because the fee only applies to 2G and 3G service. For 4G and LTE subscribers, mobile carriers offer separate phone plans that do not include a basic monthly fee.

According to Lee, the committee is looking closely at whether there is a category comparable to the basic fee for 4G and LTE subscribers. Other possible alternatives include cutting the general data usage fee for everyone and expanding the number of public zones with free wireless internet service, which would be the path of least resistance.

The committee is expected to shelve abolishing the basic monthly fee as a long-term goal because of fierce opposition from mobile carriers.

“We need voluntary cooperation from the nation’s ICT Ministry and mobile carriers, as well as the understanding of consumers to lower phone bills,” Lee said.

According to industry sources, the ministry suggested gradual implementation of basic fee removal to ease the blow to telecom companies and recommended alternative plans like raising discounts for monthly phone bills or releasing a new cheaper phone plan for all users.

Raising discounts on phone bills is considered a feasible alternative to eliminating the basic fee. Currently, a 20 percent discount on monthly phone bills is given to customers who decide to forego subsidies offered by mobile carriers when they buy a new device. The ministry is considering plans to raise the discount to 25 percent, which could mean more than 11,000 won saved a month on phone bills. About 15 million people would be eligible.

However, telecom companies are still unhappy with the plan because it could incur a 500 billion won annual loss combined for the country’s three biggest mobile carriers.

Other possible paths include forming a cooperative body comprising the government, companies and consumer rights groups to discuss the matter and carrying over unused data from the end of the month to the end of the year.

“It will be hard to finalize the phone bill plan any time soon,” Choi Bo-won, an analyst at Hana Financial Investment, said in a report Friday. “The final decision will likely be made after July.”

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