KCC chief to meet with telco CEOs to discuss mobile fee reduction

Kim Hong-il, head of the Korea Communications Commission. [Photo by Yonhap]

Kim Hong-il, head of the Korea Communications Commission (KCC) will meet with the chief executive officers (CEOs) of South Korea’s three major telecom companies next week. The meeting, which will be held on March 22, comes as the government is pursuing a policy to cut household mobile fees.

According to sources on Sunday, Kim will gather with the CEOs of SK telecom Co., KT Corp., and LG Uplus Corp. at the government complex in Gwacheon, Gyeonggi Province. Kim is expected to share the planned amendments to the enforcement decree of the Mobile Device Distribution Improvement Act and seek industry cooperation.

High-ranking representatives from smartphone manufacturers such as Samsung Electronics Co. and Apple Korea are also known to be in attendance.

Key topics for discussion are likely to include telecommunications cost reduction and the release of mid-range priced smartphones.

The KCC, acknowledging the time-consuming process of repealing the Act, has taken steps to foster conditions for enhanced marketing competition among telecom companies.

Recently, a drafted public notice was announced, proposing amendments to the enforcement decree, allowing a maximum subsidy of 500,000 won ($380) to support individuals in their transition between mobile service providers.

This support is intended to ease the financial burden on users switching telecom providers, offering an additional incentive beyond the publicly disclosed subsidies already provided by such companies. If approved, these benefits could take effect as early as this month.

In January, the KCC expressed its intention to pursue the repeal of the Act during a public hearing, emphasizing the need for legislative approval.

However, recognizing the time constraints associated with legislative processes, the KCC highlighted its commitment to stimulate marketing competition among telecom operators through enforcement decree and public notice options, even before the Act is repealed.

Concerns have been raised about the potential adverse effects on telecom companies’ profitability as a result of reduced telecommunication fees.

Mobile Virtual Network Operators (MVNO providers), or thrifty phone service operators, in the meantime, are expressing opposition to the proposed subsidy expansion by the government.

Their concern stems from the perceived risk of a mass exodus of MVNO users back to the three major telecom companies.