Electric use charge in long term exemption card… Government to lead ‘sub-brand reactivation
Jong Ye Lin | yeslin@ | 2018-05-30 10:06:39

The Korean government is leading for a long-term exemption of the fee for the use of public telephones. Recently, the Ministry of Science and Technology Ministry of Information and Communication Legislation is pushing forward with the regulation reform commission of the universal fare system and the survival crisis of the mobile phone industry is growing.

According to industry sources on May 29, the Ministry of Information and Communication (MIC) started a full-fledged operation this month to exempt radio telephony fees from long-term use. Recently, the Ministry of Strategy and Finance conducted negotiations for the exemption of the use of radio waves. "I am discussing the goal of long-term exemption until at least the telephony industry turns into a surplus," said Jeon Seong-bae, director general of communications policy at the Ministry of Information and Communication. The use of radio waves is subject to the extent, form, and purpose of radio waves for all radio station licensees except for the exempted radio stations designated by the State.

On the other hand, the mobile phone industry has been demanding a full exemption of the radio usage fee. The radio wave fee shall be borne by a mobile carrier (MNO) with telecommunication facilities. An industry expert said, "If you are renting a facility like a flat phone and a service provider, you pay for it."

So far, the industry has been virtually exempted from the use of radio waves. This is because the Ministry of Information and Communication has continued to extend the exemption for the settlement of the market. In 2012, it has been extended for one year after exempting the radio fee for three years. Most recently, it has delayed the exemption until September this year through a partial amendment to the Enforcement Decree of the Radiocommunication Act that was enacted in July last year. If there is no agreement by September, the mobile phone industry will have to pay the radio fee immediately from October. The usage fee for radio wave is 461 won per subscriber, and considering the current number of users in the flat phone is about 7.5 million, the industry should pay about KRW 34.5 billion per year.

Despite it is demanded, it is not easy for long-term exemption of fee for use of radio wave. Although the overall phone industry has recorded a loss, some small and medium-sized companies, excluding large subsidiaries, are recording a profit. An industry official said, "There is also a talk about whether it is necessary to exempt radio usage fees from the accounting department where some of the operators are turning to surplus."

A spokesperson for the Ministry of Information and Communication said, "Even if some companies except for large subsidiaries are in surplus, if they pay more than KRW 30 billion per year, they are likely to turn into deficits."

On the other hand, the mobile phone industry claims that the difficulties are getting bigger. It is a matter of time for small and medium-sized companies to shift to a deficit because of the sudden departure of subscribers. We also have less opportunity to show the user to the phone. At the end of last year, Homeplus has sold handsets, and E-Mart has also announced that it will abandon its new subscription.

An industry expert stated, "If you pay the fee, you will not have a small percentage of the total." Companies that are in the red are more likely to suffer from losses."

By Jong Ye Lin yeslin@

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