Mobile fee discount to be expanded up to 25%…Basic fee abolition on hold
Jung Yoon Hee | yuni@ | 2017-06-23 10:59:40
Korean government confirmed mobile fee reduction plan
The new government has confirmed to establish rate of mobile fee discounts (rate discounts corresponding to subsidies, choice contracts) from 25% to 20%, and reduce mobile cost for vulnerable households by KRW 11 thousand on monthly basis. In the mid-to-long term, the company has also set up a `universal data rate plan` for KRW 20,000, and to expand public Wi-Fi and introduce a separation notification system. The abolition of the basic fee, which had been controversial, was once ruled out. However, criticism that the government is overly interfering with the market competition is getting out of the way due to the industrial opposition to the abolition of the basic fee and the upward revision of the selective contract discount rate.
On June 22, the National Planning and Advisory Committee with Democratic Party revealed that it will reduce the mobile fee of the nation dramatically by implementing countermeasures to reduce communication costs and implementing it step by step. The Korean government expects that the short-term measures alone will have the effect of saving up to KRW 1.6 trillion in annual mobile phone costs. It is expected that the maximum mobile phone cost of KRW 4.6 trillion will be returned to the people under consideration of the effects of mid-to long-term measures.
As for the short-term countermeasures, △ increase rate reduction of vulnerable social groups △ the discount rate increase of selective contracts from the current 20% to 25% △ measures proposal such as extension of radio wave fee reduction and wholesale price cut have been suggested. First of all, the government will reduce the amount of KRW 11,000 per month for the elderly (basic pension recipients) during the second half of this year. Meanwhile, for the low-income earners who have already been exempted from the exemption, additional KRW 11,000 will be cut. It is expected that the mobile fee reduction target will be about 3.29 million people, saving KRW 517.3 billion annually. The tax cuts for the vulnerable social groups will be implemented in November, this year, following the announcement of legislation next month.
The discount rate for selected contracts will be raised from 20% to 25%. As the discount rate increases, existing subscribers will receive KRW 2,000 per month and new subscribers will receive KRW 10,000 per month discount in accordance with the average subscription rate (KRW 40,000). The government plans to adjust the discount rate through the preparation period of about two months. It is expected that additional mobile phone cost savings of KRW 1 trillion a year will occur due to the increase in the number of optional subscriptions. The government also confirmed to continue to support the low-cost phone such as the reduction of the radio wave fee for use and the wholesale price cut.
The mid and long-term countermeasures are required to revise the law and secure budgets, and introduce a `universal mobile fee system` which provides voice and data (1GB) of the existing KRW 30,000 plan to KRW 20,000. Once, the `universal mobile fee system` is introduced, the government expected that the direct and indirect effects of reducing LTE tariffs by more than KRW 10,000 per month (KRW 1.2 trillion to KRW 2.2 trillion in annual communication costs) would occur. The `universal mobile fee system` plans to submit the revised bill to the National Assembly in the second half of this year.
The government has also decied to increase public wi-fi dramatically. Public wi-fi is expected to installed in buses (50,000), schools (150,000) in total 200,000, and it plans to reduce annual data charges of KRW 48 billion to KRW 850 billion for company workers and students (KRW 12.68 million). The government plans to push forward from next year, once the budget is secured.
The revision of the mobile phone distribution structure improvement law (the law to restrict phone subsidies) is abolished and the separation disclosure system is introduced. In addition, the government plans to disclose the prices of domestic and overseas mobile phones to reduce the burden on users to buy mobile phones. Meanwhile, the government decided to form a social consultative mechanism to relax the regulation of entry into the mobile phone market from the current permit system to the registration system, and to analyze the structural problems of mobile phone charges and the cost burden reduction analysis.
By Jung Yoon Hee yuni@
[ copyright ⓒ The Digitaltimes ]
The new government has confirmed to establish rate of mobile fee discounts (rate discounts corresponding to subsidies, choice contracts) from 25% to 20%, and reduce mobile cost for vulnerable households by KRW 11 thousand on monthly basis. In the mid-to-long term, the company has also set up a `universal data rate plan` for KRW 20,000, and to expand public Wi-Fi and introduce a separation notification system. The abolition of the basic fee, which had been controversial, was once ruled out. However, criticism that the government is overly interfering with the market competition is getting out of the way due to the industrial opposition to the abolition of the basic fee and the upward revision of the selective contract discount rate.
On June 22, the National Planning and Advisory Committee with Democratic Party revealed that it will reduce the mobile fee of the nation dramatically by implementing countermeasures to reduce communication costs and implementing it step by step. The Korean government expects that the short-term measures alone will have the effect of saving up to KRW 1.6 trillion in annual mobile phone costs. It is expected that the maximum mobile phone cost of KRW 4.6 trillion will be returned to the people under consideration of the effects of mid-to long-term measures.
As for the short-term countermeasures, △ increase rate reduction of vulnerable social groups △ the discount rate increase of selective contracts from the current 20% to 25% △ measures proposal such as extension of radio wave fee reduction and wholesale price cut have been suggested. First of all, the government will reduce the amount of KRW 11,000 per month for the elderly (basic pension recipients) during the second half of this year. Meanwhile, for the low-income earners who have already been exempted from the exemption, additional KRW 11,000 will be cut. It is expected that the mobile fee reduction target will be about 3.29 million people, saving KRW 517.3 billion annually. The tax cuts for the vulnerable social groups will be implemented in November, this year, following the announcement of legislation next month.
The discount rate for selected contracts will be raised from 20% to 25%. As the discount rate increases, existing subscribers will receive KRW 2,000 per month and new subscribers will receive KRW 10,000 per month discount in accordance with the average subscription rate (KRW 40,000). The government plans to adjust the discount rate through the preparation period of about two months. It is expected that additional mobile phone cost savings of KRW 1 trillion a year will occur due to the increase in the number of optional subscriptions. The government also confirmed to continue to support the low-cost phone such as the reduction of the radio wave fee for use and the wholesale price cut.
The mid and long-term countermeasures are required to revise the law and secure budgets, and introduce a `universal mobile fee system` which provides voice and data (1GB) of the existing KRW 30,000 plan to KRW 20,000. Once, the `universal mobile fee system` is introduced, the government expected that the direct and indirect effects of reducing LTE tariffs by more than KRW 10,000 per month (KRW 1.2 trillion to KRW 2.2 trillion in annual communication costs) would occur. The `universal mobile fee system` plans to submit the revised bill to the National Assembly in the second half of this year.
The government has also decied to increase public wi-fi dramatically. Public wi-fi is expected to installed in buses (50,000), schools (150,000) in total 200,000, and it plans to reduce annual data charges of KRW 48 billion to KRW 850 billion for company workers and students (KRW 12.68 million). The government plans to push forward from next year, once the budget is secured.
The revision of the mobile phone distribution structure improvement law (the law to restrict phone subsidies) is abolished and the separation disclosure system is introduced. In addition, the government plans to disclose the prices of domestic and overseas mobile phones to reduce the burden on users to buy mobile phones. Meanwhile, the government decided to form a social consultative mechanism to relax the regulation of entry into the mobile phone market from the current permit system to the registration system, and to analyze the structural problems of mobile phone charges and the cost burden reduction analysis.
By Jung Yoon Hee yuni@