Burden of Cancelling High-Speed Internet Reduced... Early Termination Fees Decrease in Later Contract Periods

Penalty Reduced by About 40% After 18 Months with a 3-Year Contract

The Ministry of Science and ICT announced that, in consultation with the four major telecommunications companies?SK Telecom, KT, LG Uplus, and SK Broadband?it will reduce the early termination penalties (discount repayment fees) for high-speed internet services in the latter part of the contract period.

This improvement is a follow-up measure to the "Telecommunications Market Competition Promotion Plan" announced on the 6th.

Example of penalty improvement
Photo by Ministry of Science and ICT

The high-speed internet market is primarily formed around 3-year contracts, and the previous penalty structure increased until the point exceeding two-thirds of the contract period (over 24 months) and then decreased. Substantial penalties were incurred until just before the contract expiration (36th month), placing a burden on users who terminated within the contract period.

To address this issue, the Ministry of Science and ICT consulted with the four telecom companies on improving the penalty structure. After discussions with the Telecommunications Service System Improvement Advisory Committee, which includes consumer groups, experts, and service providers, it was decided to improve the penalty structure by increasing the contribution for the user’s subscription retention period.

According to the improvement plan, penalties will begin to decrease after passing half of the contract period (18 months) and will drop to zero at the expiration point (36 months), changing to a bell-shaped structure. The maximum penalty amount will be reduced by 8% to 14%, and penalties in the latter half of the contract period (after 18 months) will decrease by an average of about 40%.

The four telecom companies reported terms of service reflecting these improvements on the same day. After system development, KT plans to implement the changes from September 8, SKT and SKB from September 27, and LG Uplus from November 1.

Professor Shin Min-su of Hanyang University, chair of the Telecommunications Service System Improvement Advisory Committee, stated, “High-speed internet, along with mobile phones, is a major telecommunications service used by the majority of the public and holds an important position in bundled service usage. With this improvement lowering the burden of terminating high-speed internet services, it is expected that users will switch providers more actively, contributing to revitalizing competition in the telecommunications market.”

The Ministry of Science and ICT said, “We will continue to identify and improve user inconveniences and actively promote efforts to enhance public benefits by encouraging competition among telecom companies in pricing, marketing, and quality.”

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