Information Ministry Heavily Criticized for Discounted Airtime Plan

The Ministry of Information and Communication recently allowed SK Telecom to charge discounted rates for airtime for its subscribers. Korea’s biggest phone service provider KT joined the other wireless carriers such as KTF and LG Telecom, and criticizes the decision.

In protest, four major local and long-distance carriers, KT, Hanaro Telecom, LG Telecom and Onse Telecom filed an official petition with the ministry on September 21, requesting the revocation of the decision.

They argued in the petition, “Subject to the decision, SK Telecom will charge 60 won [i.e. approximately 60 cents] per minute of airtime. But the cost is 65.4 won. Further, it costs SK Telecom 51.7 won to connect a phone call from a cell phone user to a residential or business phone line. It, however, will charge 120 won for the airtime. The airtime plan will hamper fair competition in the market, and constitute a violation of the Fair Trade Act.”

The four phone service providers also contended, “The new plan will take away 85 to 100 million dollars from the residential and long-distance industry. We will not survive the unfair competition, and Korea will no longer have traditional telecommunications companies.”

The ministry had expected severe criticism for the ramifications that its decision may cast on fairness in the market. Faced with opposition even from local and long-distance carriers, it has found itself in hot water.

At the September 19 press conference, a senior official of the ministry acknowledged the monopolistic effect of its decision on the market. The official, however, commented, “We will see what actually happens. It will take about 3-6 months. If something happens, then we will take some measures.”

Most experts point to Cheong Wa Dae, or South Korea’s “White House,” as the epicenter of this debacle. According to them, President Roh strongly wished to lower airtime prices, and the ministry, without much consideration, hurried into action to please its boss.

On the other hand, SK Telecom will reportedly hold a press conference as early as next Monday to appease the burgeoning opposition.

An SK Telecom official said on the condition of anonymity, “The discount applies only to airtime between our subscribers. It will not have much impact.”

To maximize the marketing effect of the discount plan, the company will feature inter-subscriber calls with a special ring tone.

nex@donga.com