By Kim Tong-hyung
Korean telecommunications companies are moving to restrict smartphone applications from using their networks for free Internet telephony, drawing an angry response from customers who feel cheated out of their monthly data allowances.
Companies like Skype have been introducing a slew of apps that support voice over Internet protocol (VoIP), a technology that allows voice calls to be routed over the mobile Internet. Mobile-phone operators, which are desperate to see better returns on their massive investments in third-generation (3G) cellular networks, consider VoIP as a threat to their revenue.
Since August, SK Telecom, the local wireless kingpin that controls more than half of the country’s mobile-phone users, have been preventing customers signed to monthly fixed-rate plans of 45,000 won (about $39) or cheaper from using VoIP apps on its cellular network. The carrier is intent on allowing only high-volume users paying more than 55,000 won a month to use VoIP on 3G phones.
KT, the No. 2 carrier and exclusive provider of the Apple iPhones here, is now mimicking its rival, allowing only customers paying more than 55,000 won a month to use the VoIP apps on its network. LG Uplus, the country’s smallest carrier, is disconnecting VoIP apps from its cellular network entirely.
The carriers claim that the restrictions are inevitable to prevent other companies from free-riding on their networks. They say the increase in VoIP-related traffic could also put an excessive strain on their data networks.
``The business model of the mobile VoIP developers has them providing services based on the networks of carriers without paying the appropriate cost. This gives them an unfair competitive advantage over existing ‘special category’ telecommunications operators, such as those providing added-value data services, who pay carriers for network usage,’’ said a KT spokesman.
``Through our customer contracts, we had already been informing our users that we won’t be allowing VoIP over our 3G network. We didn’t take any actions until now, as the number of VoIP apps has been increasingly rapidly and so has the traffic generated from them.’’
Consumers aren’t buying such explanations. It’s absurd for the carriers to talk about VoIP pressuring their data networks, they say, when mobile users paying more than 55,000 won a month are mostly signed to all-you-can-use mobile data plans. They also claim that the carriers shouldn’t be dictating what the customers can and can’t do with the monthly data allowance they purchased.
``Why should carriers have the right to nitpick about what customers can and can’t use with the monthly data allowances they have paid for? This is an infringement of consumer rights and it shouldn’t matter whether the user is signed up for 45 (45,000 won) or 55 (55,000 won),’’ read one of the postings on a Daum (www.daum.net) message board.
Perhaps, the carriers’ touchy response to VoIP is best explained by the way they are structuring their monthly fixed-rate plans, which provide generous data allowance but not-as-generous voice minutes.
According to figures by the Korea Communications Commission (KCC), the country’s broadcasting and telecommunications regulator, SK Telecom users signed to the 55,000 won contract are spending an average of 357 minutes in voice calls per month, compared to their allowance of 300. KT customers signed to 45,000 won per month contracts, which provide an allowance of 250 voice minutes, actually consume about 311 minutes a month.
The average Korean mobile user uses about 220 voice minutes per month, according to KCC figures.
``Mobile users currently signed to 45,000 won contracts frequently end up paying more than 60,000 won a month,’’ said an official from the civic group Consumers Korea.
``The fact that most of the subscribers to monthly fixed-rate plans, aside from the very premium users, are paying additional fees shows that carriers have been designing their products to further exploit the wallets of consumers.’’
Carriers in other advanced wireless nations have been showing more willingness to work with VoIP providers and explore what they can gain from allowing VoIP calls over their networks, rather than just dwelling on what they are losing.
Skype, the current VoIP kingpin, has partnerships with major carriers like the Hutchison-owned 3 UK, Verizon Wireless and KDDI. There are already close to a dozen VoIP apps beside Skype for the iPhone alone, and some of them, including Fring, Nimbuzz and Vopium, leverage popular instant messaging services to connect users of MSN Messenger, Google Talk, Twitter and Yahoo.