5G Plans Around 30,000 KRW... Lawmakers Line Up Saying "Highly Appreciate SKT's Decision" Unusually Enthusiastic Support

[Image source=Yonhap News]

[Asia Economy Reporter Seulgina Cho] The National Assembly is showing unusually strong support for SK Telecom's 5G mid-range plan priced at around 30,000 KRW per month, which was reported to the Ministry of Science and ICT. This is particularly meaningful as it represents a reduction in communication costs led by the top telecommunications company amid the prolonged economic downturn caused by the COVID-19 pandemic.

Following SK Telecom, KT and LG Uplus are also considering new plans, and it is expected that the pace of 5G rate reductions, which have long been a source of user dissatisfaction, will accelerate.

According to the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee (STIBC) on the 30th, Cho Seung-rae, the ruling party's spokesperson and a member of the Democratic Party of Korea, issued a separate statement the previous afternoon, saying, "We highly appreciate SK Telecom's decision to launch a plan up to 30% cheaper than existing rates." Cho emphasized, "There is great expectation that this will contribute to alleviating the burden of communication costs on households,” and “SK Telecom's online plan is also significant as it is the first plan launched after the National Assembly changed the rate approval system to a notification system."

Lee Won-wook, chairman of the STIBC, also released a welcoming statement on the same day, expressing hope that "the rate competition among telecom companies due to the notification system will lead to reduced communication costs for the public." He added, "The launch of SK Telecom's untact plan will positively influence future policy decisions of each telecom company," and urged, "I hope this will be an opportunity for telecom companies to become trusted by the public."

Woo Sang-ho, a Democratic Party member running for Seoul mayor, also stated, "People no longer have to pay high rates of 100,000 to 130,000 KRW daily. I urge the Ministry of Science and ICT to promptly review so that the public can use this plan as soon as possible." According to the revised Telecommunications Business Act and its enforcement decree, the Ministry of Science and ICT will review within 15 days whether the plan harms user interests or fair competition. In this regard, the National Assembly has taken the lead in urging swift processing and applying gentle pressure.

Assemblyman Han Jun-ho also expressed expectations through his SNS, saying, "SK Telecom actively accepted the demands of the National Assembly, including mine," and "This online plan will act as a catalyst to bridge the information gap among social members and reduce household communication costs."

It is considered very unusual for the political sphere to openly support a rate plan reported by an individual telecom company. SK Telecom's untact plan (tentative name) 5G plan, reported the previous afternoon, is characterized by reduced marketing costs through online-only sales, resulting in lower prices. The 5G plans offer 9GB of data for 38,500 KRW per month, 200GB for 52,500 KRW per month, and unlimited data for 60,000 KRW per month. These are about 30% cheaper than existing plans, and high public response is expected.

Notably, this plan is the first case after the abolition of the rate approval system and the introduction of the notification system. It marks a turning point indicating the future market direction following the introduction of the notification system. Moreover, it was launched in response to demands from the National Assembly. During early discussions on abolishing the rate approval system, the STIBC had expressed concerns that increased autonomy in rate decisions by telecom companies could lead to higher household communication costs. This would not only contradict the Moon Jae-in administration's pledge to reduce household communication costs but also impose a greater burden on citizens struggling with the prolonged COVID-19 pandemic. As a result, during this year's audit, there were strong calls for the three major telecom companies to launch cheaper and more diverse plans.

As the top operator, SK Telecom's reporting of a 5G plan about 30% cheaper than existing ones as the first case under the notification system is expected to accelerate the launch of low-cost 5G plans. KT and LG Uplus are also reportedly reviewing online plans in response to political demands.

Cho urged, "The three telecom companies should promptly launch innovative plans as promised in response to many lawmakers' demands during the audit." He pointed out that "the market is dominated by ultra-high-priced mobile devices, so the public's perception of reduced communication costs remains low," and identified future tasks such as mitigating distribution channel shocks due to the expansion of online plans, rational calculation of wholesale prices for affordable phones, and the introduction of intermediate 5G plans.

However, the possibility of rejection by the Ministry of Science and ICT cannot be completely ruled out. During prior consultations, the Ministry reportedly raised concerns about SK Telecom's untact plan due to issues such as plan spacing and fears of killing affordable phone providers, sparking controversy. The enforcement decree includes a clause allowing rejection if a plan excludes other operators by offering rates lower than wholesale prices.

Industry insiders view this plan as a case that could gauge the government's standards regarding 'rejection' included in the notification system's introduction. SK Telecom stated, "Considering the customer value enhancement effect of the reported plan, we expect a positive review from the government." A Ministry of Science and ICT official said, "We will review according to the law."

This content was produced with the assistance of AI translation services.