SEOUL, June 22 (Korea Bizwire) – Major South Korean telecom providers, namely KT, SKT and LG U Plus, have been finding themselves embroiled in a series of controversies in recent weeks, as pressure from the government and public to cut mobile phone bills continues to grow.
In recent weeks, the Moon administration, emboldened by overwhelming public support, has continued to pressure mobile providers to slash phone bills, targeting arbitrary ‘basic phone charges’ that have been widely criticized.
In addition, accusations of collusion and a defiant attitude to phone bill cuts have put the telecom industry on a collision course with the current government.
However, the backlash from the industry to the scrapping of the basic mobile charges, which was one of President Moon’s campaign promises, has seen the policy relegated to the back burner for the time being.
As the special presidential advisory committee is set to introduce plans today to cut phone bills by 25 percent and expand public Wi-Fi infrastructure, as well as introducing affordable mobile plans, industry insiders say telecom companies could take legal action against the government to retaliate against its aggressive policies.
As if they needed more debacles, the South Korean telecom giants are also facing accusations from the Green Consumer Network and a number of politicians of collusion with phone makers based on the price difference between unlocked phones and those on a contract.
Another criticism damaging to the public image of the telecom ‘big three’ is the economic burden unfairly placed on business affiliates by their partnerships.
South Korean mobile network providers have been using discounts and benefits at franchises as a way to attract users, but a recent report from the Korea National Council of Consumer Organizations showed discounted prices have been unfairly imposed on some of the food and beverage franchises, while telecom companies cover little to none of the margin after discounts promised to their user base.
One industry watchdog official warns the unfair partnership could lead to price rises.
“It’s unfair that telecom companies don’t cover the benefits they promise to users while expecting their business affiliates to take financial responsibility. As it could lead to price increases, something must be done to improve the relations between the two parties,” an official said.
Hyunsu Yim (email@example.com)