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South Korea forces cellphone rate cuts

updated 11:50 am EDT, Mon September 28, 2009

South Korea cell rate plans

The South Korean government's Communications Commission today ordered (subscription required) that carriers cut their subscription rates. The act follows up election promises by President Lee Myung-bak and will have all three major carriers in the country slash their voice, data and bundle prices by varying degrees. SK Telecom, which has just over half of the Korean market, will cut its voice rates by 27 percent to about $35 and its data plans by about 19 percent. KT will cut its own basic voice rate 20 percent to about $20 a month and will drop its data rates a sharp 62 percent. LG Telecom's voice prices should lower by about 25 percent.

All of the cuts should take effect by November and will be accompanied by an across-the-board 50 percent drop in the cost of bundled service.

The political gesture is expected to have a significant impact on the country's wireless market. Although one of the countries most eager to adopt cellphones and one of the first that had widespread 3G networks, South Korea has faced pressure from the Organization for Economic Cooperation and Development (OECD) after a study found that the nation had some of the most expensive access rates in the world. Local carriers, however, have said their own profit margins are already low as they have to use price to lure customers in a market where most customers already have cellphones.

Despite opposition, the cuts are unofficially expected to further help the adoption of smartphones in the area. Earlier this month, the Communications Commission exempted the iPhone from having to obey certain location awareness rules deemed too restrictive. No official carrier deal has been struck, but an eventual arrival would let carriers recoup wireless revenues from subscribers including a data plan with their phone service.



By Electronista Staff
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Comments

  1. bleee

    Mac Enthusiast

    Joined: Mar 2002

    0

    This is what I call "progressive"

    North America should follow South Korea's lead.

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