On September 4, the government announced a task force aimed at helping the weak, like the elderly and juveniles. Cheon Ho-sun, the spokesman of Cheongwadae said that President Roh Moo-hyun discussed several policies in order to relieve people’s financial hardships. Among them, the one that attracted many people’s attention was to reduce mobile phone rates. It also includes a discount for people who charge little because they were also considered the weak. In fact, it has been controversial between telecommunication companies and mobile phone users. Moreover, a few months ago, a news report stirred the users, which pointed out that compared to other countries; the rate in Korea was too excessive.
In spite of severe criticism from users and government, the major telecommunication companies claim that nothing has been decided yet. Most of all, they insist that discounting the charges for people who pay little is not acceptable in that those are not always the socially weak. The companies blame the government that its plan violates the basic order of the market – the law of supply and demand. At the same time, SK telecom planned to add the paid content to the fixed charge for juveniles in 1 or 2 months. Also, regarding the argument on the expensive wireless network fees per each user, they object that it shows the spread of high technology. In other words, they said that it is the result of IT growth in Korea.
Still, some problems on the charge are raised. Three major telecommunication companies have cut basic rates gradually, which shows that there is room for improvement. For example, from 2000 to 2005, the basic price was reduced from 18000 won to 13000 won in SK telecom. In addition, contrary to other countries which considered Caller Identification Presentation Supplementary Service(CID) as a free service, the companies insisted that it is an additional paid service. They also reduced wireless network charges after a burdensome price for juveniles was brought to light.
The Voice of General Users
Cho (32) has always been dissatisfied with the charges. She said “When I watch too many advertisements regarding the telecommunication companies, I can’t stop thinking that the cost of the advertisements must be included in my charges. It has been a systemic problem.”
Goo (17) said “I watched a TV program about comparison of mobile phone charges in other countries. And in Hong Kong, the telephone charges among people who joined the same telecommunication company were all free. So I was wondering if it was also possible in Korea. Also, another big problem is that while the fee of wireless communication is too expensive for young people, there are few ways to prevent them from using it too much.”
Similar to these views, many consumers think that the charge they pay is unfair.
Two Contrary Examples of Rates in Other Countries
Hong Kong, mentioned as a cheap price for mobile phone users, truly offers low charges. Chan Tze-yee, the vice general in the Office of the Telecommunications Authority, said that Hong Kong has good conditions for mobile phone users. For instance, it has a high population density which enables telecommunication companies to invest more and more. Moreover, since there was no regulation to the market, the evil influence of an oligopoly didn’t arise.
On the other hand, the charges in Japan are more expensive than Korea. In Japan, mobile phone users benefit low mobile phone price instead of paying high charge later. That’s why 0 Yen mobile phone is very popular in Japan. It is also at issue between high charge and low mobile phone price. No one can insist which is better because both have merits and demerits.
On September 19, SK telecom announced its new policy reducing telephone charges to half from its former rate. Considering the user’s dissatisfaction, this is definitely an eye-opening improvement. However, its rival telecommunication companies, KTF and LG telecom, criticized SK telecom for its attractive new policy. They assert that this may cause SK telecom to hold more market share and worse monopolize the telecommunication system in the end. According to an activist named Chun Eung-hwi from National Council of the Green Consumers Network said “Reducing phone rates among company users is very positive in that it reinvigorates the basic order of the market. Nevertheless, the problem is how much less money the consumers pay through this plan. So the Ministry of Information and Communication and each telecommunication companies should clarify the extra profit and the percentage of the company’s reduction, so as to be persuasive to users.”