KT agrees to lift limit in 5G unlimited data package

After a swift public outcry, KT agreed to take out a fine-print clause in phone contracts that limited data usage in supposedly unlimited data plans.

Before 5G was activated last week, KT boldly announced it would offer unlimited 5G data. KT’s decision prompted SK Telecom and LG U+ to bring out unlimited data plans, too.

But KT later disclosed on its website that the company would automatically limit data speed to 1 megabit per second if a user used up to 53 gigabytes per day for two days in a row. That fine-print detail was revealed on April 5, four days after KT started accepting pre-orders for Samsung Galaxy S10 5G phones. At 1 megabit per second, a user can stream a video but only at 360p resolution - the second-lowest of the five resolutions available on Naver TV - according to KT.

“KT reported to the Ministry of Science and ICT that we are revising our Fair Use Policy in regard to the 5G unlimited data payment plan on Tuesday,” the company announced in a statement Tuesday afternoon. KT said it took out the controversial clause.

A telecommunications company’s Fair Use Policy is aimed at preventing illegal or commercial use of telecommunications services, which could slow down networks. Telecommunication companies are saying the restrictions on unlimited data use are to prevent such misuses.

LG U+ had a similar clause on its website. According to its payment terms and conditions, the company’s 5G service users would be monitored if they used more than 50 gigabytes per day for two days straight.

LG U+ claims it's less strict than KT because it doesn't automatically cut down users’ data speed. The company said it monitors the user to make sure the data isn't used for commercial or illegal purposes.

SK Telecom users don’t face such restraints.

“KT’s move to bring out an unlimited data plan forced other telecommunications companies to introduce similar unlimited payment plans,” said a source in the industry. “They tried to steal customers with such an offer, but then tried to get away with it by abusing the Fair Use Policy. It’s morally wrong.”

Another industry insider said the mobile operators are going to face big losses from their unlimited data plans.

“An unlimited data payment plan is usually introduced after a network infrastructure has moved onto a mature stage. The unlimited data plan for LTE only came out last year. It’s very unusual to launch a network with limitless data.”

Unlimited data plans for LTE service were offered last year, seven years after the networks were introduced.

SK Telecom and LG U+ offer unlimited data as part of their promotions for up to two years while KT announced it would offer unlimited data beyond a promotional period.

BY JIN MIN-JI [jin.minji@joongang.co.kr]