The government will raise the discount rate for people's telecom subscriptions from 20 percent to 25 percent as of mid-September, according to the Ministry of Science and ICT (MSIT).
This is the first part of President Moon Jae-in's campaign pledge to cut telecom expenses.
Those who sign up for a one- to two-year subscription with a mobile carrier after Sept. 15 can benefit from the new policy, according to the MSIT.
But this has raised a debate, as existing subscribers cannot enjoy the benefits.
"Under the current legal system, we cannot mandate mobile carriers to push ahead with the new policy for their existing telecom users," the MSIT said in a statement.
"But we are going to hold additional negotiations with carriers to alleviate telecom burdens for existing subscribers."
The government expects more than 190 million users to take advantage of the policy, helping to reduce an annual household telecom burden of up to 1 trillion won ($876 million).
The revised discount rate was set to take effect Sept. 1. But the government delayed the plan because mobile carriers needed more time to update their computing systems and educate retail staff about the policy.
"On Friday, we notified the nation's three mobile carriers — SK Telecom, KT and LG Uplus — of details of the discount policy," the ministry said.
But mobile carriers have yet to come to terms with the government drive.
Yang Hwan-jeong, director of the telecom policy at the MSIT, said nothing had been settled about whether carriers would comply with the policy.
"We planned to hold a meeting with chiefs of the three carriers this week, but failed," he said.
He said mobile carriers feared the policy posed a threat to management stability, but the government was still considering holding more talks to narrow the differences.
Botched telecom pledge
The reduction in mobile telecom costs was one of Moon's major campaign pledges while running for the presidency this year.
His main telecom pledge was to abolish the basic monthly fee of 11,000 won.
But since taking office in May, he has failed to push ahead with the plan amid fierce opposition from mobile carriers.
They said the pledge would come at the cost of their businesses at a critical time when they had to make aggressive investment to embrace the fifth-generation (5G) telecom era. The long-term-evolution (LTE) wireless telecom network is their major revenue source and carriers claim the pledge could deal a severe blow to their plans.
There is little chance that the government can fulfill the pledge in Moon's five-year term. This is because, if the government enforces the plan, carriers are highly likely to cut subsidies and introduce other measures to make up for potential losses from the basic telecom fee.
Customers would be the victims of such a dispute, being forced to buy handsets at much higher prices.
Because the government has reached a deadlock over the initial plan, it opted to raise the discount rate, which has drawn weak support from customers.
According to a State Affairs Planning Advisory Committee survey, more than 60 percent of the random sample 1,000 people called the 25 percent subscription discount "unsatisfactory," with only 3 percent saying it was satisfactory.
This is in contrast to overwhelming support for the policy of abolishing the basic telecom fee. About 72 percent of survey participants supported the pledge, the nonprofit Green Consumer Network said, citing committee data.
"The survey shows the latest telecom policy falls short of the public's expectations," said an official from the civic organization. "But the government remains passive in its telecom policy, and the mobile carriers continue to threaten to take legal steps over tougher telecom regulations."
He said that on top of this, the government should include existing subscribers among those to benefit from the 25 percent subscription discount, so customers no longer felt distrust and dissatisfaction with the new government.
Source: http://koreatimes.co.kr/www/tech/2017/08/133_235054.html
