SEOUL, Feb. 6 (Korea Bizwire) – Major South Korean telecom providers are resorting to upselling tactics to improve sales after the government implemented a compulsory monthly plan discount policy.
The three major mobile providers in South Korea, namely SKT, KT, and LG Uplus, are set to focus on upselling customers this year, as the latest figures show mobile sales stayed strong despite a 25 percent monthly plan discount imposed by the government last year.
According to industry sources on Sunday, LG Uplus saw customers paying over 80,000 won per month grow from 3 percent of its user base to nearly 10 percent during the last quarter of 2017, resulting in a 9.2 percent increase in profits.
LG Uplus will reportedly continue its upselling-focused sales strategy this year, introducing new benefits for premium monthly plan users.
Upselling tactics, which are used in the sales industry to persuade customers to opt for more expensive options, cushioned the possible damage on South Korea telecom networks last year, in the wake of a required 25 percent monthly plan discount introduced by the current administration.
KT is also pushing its high-end monthly plans by offering users access to additional mobile media content such as music streaming and video services.
SK Telecom is also following suit, as reports show the largest mobile carrier in South Korea is considering the idea of offering more benefits to encourage users to choose a more expensive data plan.
The three major South Korean telecom providers all took a hit when the compulsory discount was announced in the third quarter of last year, but sales bounced back the following quarter, with operating profits estimated at between 750 and 800 billion won, up 5 to 10 percent from the year before.
Though sales are expected to be similar to last year, reaching 13.5 trillion won, experts argue the increased marketing expenses on a series of flagship smartphone releases, including the iPhone 8, could take a heavy toll on operating profits.
The 25 percent monthly mobile plan policy entered effect last September as part of the government’s efforts to make mobile plans more affordable.
President Moon Jae-in made it his priority to cut down on mobile expenses for the public, making affordable monthly plans one of his key promises as a presidential candidate last year.