By Cho Jin-seo
Staff Reporter
The government and SK Telecom have joined hands to introduce a new mobile call price plan that offers a 50-percent discount for calls made between its subscribers for a monthly fee of 2,500 won.
The Ministry of Information and Communication also said that all of the country's three mobile carriers have agreed to cut the rate of short messaging service from 30 won to 20 won from January. A variety of discount plans for seniors, disabled people and young people were unveiled as well.
Starting next month, the new internal-call discount policy can bring a considerable saving to phone users, depending on their phone usage.
It is not unusual for the government to intervene in setting the price of communication services. The ministry has a power to sway the mobile carriers as it controls the radio frequency they use. It also regulates the firms with various penalties and incentives.
``Price of goods and services are supposedly set by proper market competition. But when there is lack of competition, the government should intervene with its policies,'' Minister Yoo Young-hwan said in a press briefing on Wednesday.
The ministry has been cajoling the firms to lower their rates, on the vocal demands from politicians, consumer groups and the YMCA. Lowering mobile fees was also one of President Roh Moo-hyun's campaign pledges. The ministry has been trying to cut the rate before a new president takes office in February.
Wednesday's announcement instantly enraged smaller carriers KTF and LG Telecom. They claimed that a discount on internal calls is likely to further solidify SK Telecom's already dominant position in the market.
Many LG Telecom and KTF users will be tempted to shift their subscription to SK Telecom to which about half of mobile phone users belong, they argued. KTF especially said that it has no intention of adopting such a system by itself, though observers believe that both will eventually follow suits, grudgingly.
``We may set new guidelines after monitoring the response from the market. But our basic policy is to allow the firms to do what they want to do,'' the minister said.
The YMCA remained unimpressed by SK Telecom's announcement, saying that the effect of the discount will be diluted by the increase of the basic charge.
For example, a heavy SK Telecom user who pays around 50,000 won every month, including a 13,000 won flat rate basic charge, 9,000 won for short messaging services and 3000 won for other data services, will see around 6,500 won of discount from voice calls, if half of the calls made were to other SK Telecom users. In addition, 3,000 won will be saved from short messaging. But as he or she will pay an additional 2,500 won to benefit from the new policy, the actual saving is around 7,000 won _ a 14-percent cut in the end. The saving will be much lower for users who make fewer calls.
Along with the general price cut, Minister Yoo announced discount plans for seniors, disabled people and juveniles.
According to the plan, senior citizens' monthly basic subscription fee will be lowered from 13,000 won to 10,000 won. People with hearing impairment or speech disorder will be able to send 1,000 short messages for free every month.