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South Korean government urged to stop intervening in mobile phone charges

Staff Writer | June 24, 2017
The Moon Jae-in administration's plans to lower mobile phone charges and scrap basic monthly rates represents excessive market intervention by the government, a local scholar said.
Lee Byung-tae
Technology   "Mobile communication is a private good"
"It is groundless that the government should intervene in the pricing of mobile phone charges by claiming mobile communication should be viewed as a public good," professor Lee Byung-tae of the Korea Advanced Institute of Science and Technology (KAIST) told a seminar at the National Assembly.

"Mobile communication is a private good provided by private businesses that purchase frequencies from the government."

President Moon has pledged to reduce mobile phone rates and abolish the monthly basic charges of 11,000 won (US$9.63) amid outcries by South Korea's three mobile carriers - SK Telecom Co., KT Corp. and LG Uplus Corp., which fear such a drastic rate reduction will eventually lead to operating losses and lack of proper investment in mobile communication technology.

Seoul has since backed off on fulfilling some promises although stating it is committed to reducing the burden on people.

The professor then dismissed the government's criticism of the monopoly of the country's mobile phone market by a few companies, saying, "The mobile communication market is monopolized by a few companies everywhere in the world.

"The government should regulate unfair business practices, not the monopoly itself."

Lee said mobile phone charges are not that high in South Korea considering the quality of the service and usage, noting the ratio of mobile phone charges to household expenditures has been falling in the past few years and that data charges have been reduced by 82 percent in the past five years.

Ahn Jin-geol, co-secretary-general of the liberal People's Solidarity for Participatory Democracy, on the other hand rebuffed such claims, insisting mobile telecommunication is a public good provided based on radio waves and frequencies.

"Therefore, it is necessary for the government to control the pricing by private businesses," Ahn insisted. "The current mobile phone market has a very low level of competition and any government policy does not have any great impact on it."

He stressed the need for the removal of the basic subscription rates and the provision of more data usage for low- and medium-rate subscribers.