hankyoreh

With local mobile carriers rushing to cut communications charges and the government unveiling measures intended to boost Internet telephony, the landscape of the nation’s telecommunications industry is showing signs of an upheaval. The very similar service charge schemes of the three major mobile carriers seem as though they are being consolidated, which means that customers will soon be able to choose systems tailored to their communications habits. Against this backdrop, SK Telecom, KTF and LG Telecom, which have all made huge profits within the tripartite market monopoly, claim that their profitability could go down, but many observers see this as the start of a price war, which could help customers reduce the financial burden from communications spending.

According to industry sources, KT, which is the nation’s largest fixed-line telephone and Internet operator, moved its new business schedule up by more than a year in order to launch Internet telephony before the end of this year. A task force led by a KT vice president has already been formed to spearhead the efforts, they said.

In addition, as the Ministry of Information and Communication plans to allow users to keep their original telephone numbers, even if they move into Internet-based service, it will likely to give a boost to this fledgling communications innovation.

KT is also planning to streamline its service charge schemes, in response to a move by mobile carriers to significantly cut intra-network communications fees for their customers. Among other things, the company will consolidate the current 144 service blocks into one and offer a single service charge rate for all voice telephone calls. It also plans to unveil diversified service charge schemes so as to provide more options to its customers.

Against this backdrop, the market for long-distance calls is facing extinction. Currently, KT accounts for 70 percent of the market with Hanarotelecom, LG Dacom, Onse competing to gain a bigger slice of the remainder.

Meanwhile, mobile carriers are also engaging in a price war. As industry leader SK Telecom decided this week to offer a 50-percent discount for calls made among its customers, the smaller LG Telecom followed suit by unveiling a free-of-charge service for such voice calls starting in November.

Second-ranked KTF also offered its own discount. Starting in November, customers will get a 30-50 percent discount not just for intra-network calls and video calls, but also for calls made to people using other carriers. SK Telecom and LG Telecom are reportedly considering a further rate cut for such services as text messaging.

If the price war translates into a real cut that eases consumer burden, consumers themselves could start to break their old habits of changing service providers or mobile carriers so frequently. Those who mostly use long-distance services at home could move to Internet-based telephony while those who frequently call users who have the same carrier could begin using intra-network discount schemes in order to reduce their monthly communications spending.

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