Telecom Companies Face '1 Trillion Won Loss' Over Realization of 'Nationwide Safe Data'

Full-Scale Proposal of Related Amendment
Expected Benefits for About 15 Million People

[Asia Economy Reporter Lim Hye-seon] Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, is advancing his small but certain happiness pledge, the ‘Nationwide Safe Data,’ as the amendment to the Telecommunications Business Act has been proposed. It is expected that about 15 million people will benefit from discounted communication fees. On the other hand, telecommunications operators are facing growing concerns as they will have to reduce losses close to 1 trillion won annually. The core of the ‘Nationwide Safe Data’ is to provide free data at a certain speed even after the basic data allowance is exhausted.

According to the telecommunications industry on the 10th, Assemblyman Byun Jae-il (Democratic Party of Korea, Cheongju-si Cheongwon-gu) officially proposed the ‘Partial Amendment to the Telecommunications Business Act’ last month to introduce the ‘Nationwide Safe Data.’ Assemblyman Byun announced that the amendment to the Telecommunications Business Act for the introduction of safe data will be completed within this year.

For 5G subscribers, unlimited data service at the minimum speed can be used as a basic service once the basic data amount is fully used. The problem lies with LTE and 3G subscribers. A considerable number of subscribers use low-cost plans priced between 30,000 and 40,000 won, with a basic data allowance of only 1 to 2 GB (gigabytes). After using all the basic data provided, an additional charge of 0.011 won per 0.5 KB (kilobyte) is applied. To avoid expensive overage fees, subscribers must use the data safety add-on service, which costs between 5,500 and 9,900 won per month.

According to the Ministry of Science and ICT, the number of LTE and 3G (including 2G) subscribers of the three major carriers and MVNOs reaches about 50 million. A telecommunications industry official explained, "We estimate that about 30 to 40% of LTE subscribers use the data safety add-on service." By reverse calculation, the number of data safety add-on service users is about 15 million. Because of this, if the data safety add-on service is provided for free, it is calculated that sales worth at least 1 trillion won will disappear. Although the speed is slow, if low-cost plans can also use unlimited data, there is a possibility that many high-cost plan users will switch to low-cost plans.

A telecommunications industry official said, "This is not simply a visible issue but a situation where the existing data-based rate plan design itself is changing," adding, "While the number of beneficiaries will certainly increase, since this is a bill that changes the foundation of the currently designed rate plans, sufficient discussions with the telecommunications industry are necessary."

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