[Column] Half-Price Communication Fees Again Ahead of the Presidential Election

[Asia Economy Reporter Cha Min-young] As the presidential election approaches, civic groups have ignited controversy over the ‘half-price communication fees.’ The promises of abolishing basic fees and halving communication costs have long been repeated as populist pledges regardless of political party, bringing to mind the joke, ‘Who is raising the cow?’

The logic of civic groups advocating for lowering communication fees remains stuck in the past decade. On the 28th, the People’s Solidarity for Participatory Democracy held a press conference claiming that "from 2012 to 2021, the three major telecom companies earned excess profits of 18.6 trillion won from LTE services." They argue that even after excluding base station investment costs, network investment costs, labor costs, and marketing expenses, this much remains, suggesting that telecom companies are making excessive profits. They also pressured the ruling party and government to directly pursue a half-price LTE communication fee policy by reducing marketing expenses. During the 2017 presidential election, when President Moon Jae-in’s campaign proposed abolishing the basic fee of 11,000 won, the civic group also claimed that "communication fees could be lowered by reducing marketing expenses."

The telecom industry evaluates such claims as stemming from a misunderstanding of the industry. Communication services fundamentally operate through investments and management across multiple networks (3G, LTE, 5G). Therefore, it is not possible to isolate a specific network and claim that "excess profits are currently being made."

If telecom companies were solely profit-driven enterprises, there would have been no need to proactively invest in 5G. Aiming to be the ‘world’s first to commercialize 5G,’ telecom companies have competed to promise and carry out 5G investments. Proactive investments were made until the number of 5G subscribers surpassed 10 million last November. The four telecom companies, including SK Broadband, have pledged to invest between 24.5 trillion and 25.7 trillion won (tentative) over three years until next year in wired and wireless infrastructure for early 5G deployment. In August, the Ministry of Science and ICT announced, "We will lead beyond 5G to 5G+," encouraging and supporting private companies to continue infrastructure investments.

The civic groups’ claim that telecom companies must drastically reduce marketing expenses to realize half-price communication fees also does not align with reality. Most marketing expenses are paid to distribution channels as incentives for acquiring general subscribers and supporting subscribers.

The biggest issue is the attempt to regulate the business logic of private companies through government policy. As private companies, telecommunications operators have the right to pursue investment, innovation, and legitimate profits. "It seems like a regressive argument trying to revert telecom companies, which handle communication infrastructure?the source of industrial competitiveness?back to 30 to 40 years ago before privatization." This is a statement from an industry insider worth reflecting on.

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