Seoul set to unveil steps to induce telecom rate cuts

SEOUL, May 23 (Yonhap) -- South Korea will soon unveil a set of measures for inducing cuts in mobile phone charges in an effort to ease people's financial burdens and help curb high inflationary pressure, a senior government official said Monday.
The announcement will be made within this week at the earliest, Vice Finance Minister Yim Jong-yong said at a weekly anti-inflation meeting with other key policymakers. The final decision will be made after coordinating with the nation's telecom regulator, the Korea Communications Commission, he added.
"We have drawn up a measure aimed at inducing price cuts by offering more choices for consumers for rate systems based on how much they use voice calling, texting and data services," Yim said.
Others are expected to focus on tackling monopolies in the market dominated by a few giant mobile carriers and other structural problems such as excessive marketing spending fueled by overheated competition.
Those measures are based on a months-long investigation into the industrial structure of the nation's mobile communications industry where three telecom giants -- SK Telecom Co., KT Corp. and LG Uplus Corp. -- compete for customers.
The probe was led by a government task force launched in February to look into the nation's telecommunication industry, frequently blamed for its high service prices.
Mobile service bills recently spiked further as many consumers have opted for smartphones equipped with high-speed Internet connectivity. Smartphones usually charge consumers much more than conventional voice call-oriented phones.
South Korea's mobile carriers have been under growing pressure to lower phone bills as consumer groups and the government criticize them for excessively profiting from their services.
But the operators have argued they need cash to upgrade their communications capacity to survive in the highly saturated market, saying that price cuts could dent their business leeway.
As of the end of March, SK Telecom controlled 50.6 percent of South Korea's wireless market, which has 51 million mobile phone users, followed by KT with a 31.7 percent market share and LG Uplus' 17.7 percent, according to the latest government data.
Yim noted that the government also plans to foster competition by allowing new service providers to enter the market, which he expects would lead to lower service prices for customers.
kokobj@yna.co.kr