New System to Merge Local, Long-distance Call Rates

A new communications rate system will merge local and long-distance call rates and give discounts on mobile rates instead of subsidies for mobile phone users, industry sources said yesterday.

The Korea Communications Commission will announce the new system this week.

The commission has sought cuts in the call rates since Korea Communications Commission Chairman Choi See-joong pledged to the National Assembly last week concrete measures to reduce communication expenses.

Mobile phone users can pay basic fees and get a 10-20 percent discount on call rates instead of receiving a mobile subsidy. The telecommunication subscription fee will also be reduced from 30,000 to 55,000 won (25 to 46 U.S. dollars) to 10,000 to 15,000 won (8.30 to 12.50 dollars). Measures to promote an advanced payment system will also be introduced.

If the new plan is implemented, long-distance calls will cost the same as local calls. For local calls, KT charges 39 won (two cents) per three minutes plus a basic monthly fee of 5,200 won (4.3 dollars). For long-distance calls of more than 31 kilometers, however, the charge is 14.5 won (one cent) per 10 seconds and 261 won (22 cents) per three minutes.

A KT source said, “We have a package that allows users to use local and long-distance calls at the same rates if they pay 2,000 won (1.7 dollars) in addition to the basic monthly fee of 5,200. We will present a new package charging the same rates if users promise to use the service for three years.”

The commission expects the measures to effectively cut communications expenses seven to eight percent. If a cut of 10 percent from a mobile rate exemption for low-income households and other measures implemented last year are reflected, the government’s pledge to cut communication rates 20 percent will be fulfilled.

At a hearing of the parliamentary committee on culture, sports, tourism, broadcasting and communications, Choi said, “The work to reduce communication expenses has reached the final stage. The final plan will be announced within the week.”

On the plan to cut mobile subscription fees and call rates seven to eight percent by scrapping the long-distance rate system, he said, “We’ve also taken these measures into consideration.”

He said, however, said that no calculation has been made on how much call rates will drop.

smhong@donga.com