SKT operates a membership program that allows customers to choose benefits tailored to their spending patterns. (Photo courtesy of SK Telecom)
SEOUL, Aug. 14 (Korea Bizwire) — A steep expansion of SK Telecom’s membership discounts — part of its compensation plan following a major hacking incident — has triggered a price war among South Korea’s mobile carriers, shifting competition from subsidies for new sign-ups to perks aimed at retaining existing customers.
Since August 11, SK Telecom customers have been eligible for 50 percent off purchases at Paris Baguette nationwide, an offer that has left store shelves bare in some locations. The promotion follows a similar deal earlier this month at Starbucks and will be extended to Domino’s Pizza later in August.
The carrier has pledged to run half-price promotions with three partner brands each month through December, alongside other benefits such as a one-time 50 percent cut to mobile bills in August and extra data allowances.
By year’s end, SK Telecom will have offered 15 such discount events. If all 22 million subscribers use the maximum benefit — 15,000 won ($11) per month for five months — the marketing cost could reach 3 trillion won ($2.3 billion), shared between the carrier and its partners.
Industry officials say the program could stimulate spending in retail and dining much like the government’s pandemic-era consumption coupons.
Rivals have moved quickly to respond. KT has rolled out weekly discounts on restaurant chains and retail stores, along with cultural perks like theater premieres and musical invitations.
LG Uplus has expanded its “U+2Plus” program to 52 partners, adding heavy summer travel discounts for theme parks, water parks and hotels.
Industry observers note that the intensified competition over membership perks may be dampening the handset subsidy battles many expected after the partial easing of South Korea’s subsidy law.
“With SK Telecom channeling massive resources into membership benefits instead of subsidies, the focus has clearly shifted,” said one telecom official.
Ashley Song (ashley@koreabizwire.com)
