South Korean telecommunications industry observers have warned that the government continues to pressure to lower mobile subscription fees, which may reduce investment in telecommunications infrastructure across South Korea.
A telecommunications industry insider who declined to be named told The Korean Times, “Telecommunications business essentially requires a large amount of capital investment, such as network equipment investment.”
The source also said: “Although it is a matter of course to be consistent with the government’s policies, it is also necessary to support measures to increase investment in the process of transition to the era of artificial intelligence, so as to prepare for the upcoming 6G network, air traffic, autonomous vehicle and other new businesses.”
On the 22nd, the Communications Committee held a meeting attended by senior officials from SK Telecom, Korea Telecom, LG u+, Samsung, Apple and other mobile communication companies, which once again raised concerns about the pressure to lower mobile communication tariffs.
KCC President Jin Hongyi has requested senior management to support the recently launched “transfer subsidy” for consumers who switch operators after purchasing new smartphones. The purpose of transfer subsidies is to enable mobile users who subscribe to expensive monthly plans to receive more subsidies.SK telecommunications
KCC Government Affairs Director Pan Shangquan told local media after the meeting, “We demand that mobile operators and phone manufacturers expand subsidies, and they promise to actively cooperate. It is expected to increase to a level acceptable to the public.”
In response to the government’s call, local media reported that three South Korean mobile operators raised the transfer subsidy amount on March 23. Currently, based on different mobile subscription plans and high-end smartphone models, the subsidy amount is as low as 30000 Korean won ($22.36) and as high as 330000 Korean won ($245.95).
For a long time, the South Korean mobile market has been known for its focus on the high-end mobile phone market – to the extent that the South Korean government has called for the launch of monthly subscription plans for the mid to low end, which are bundled with more affordable phone models.
To address this issue, mobile operators have promised to soon release a low-cost 5G plan priced at approximately 30000 Korean won (approximately 22 US dollars).
In addition, operators have been allowing users to subscribe to slower LTE services since the beginning of this year.
Raising transfer subsidies is not the only price reform being considered by the South Korean government, with the aim of making telecommunications costs more affordable for the public.
In January of this year, the government announced plans to abolish the 10 year old Mobile Device Circulation Improvement Act. This bill prohibits mobile operators from providing excessive discounts or illegal subsidies to users.

This bill came into effect in 2014, aiming to lower the prices of mobile phone users and promote market competition by setting subsidy limits for new phone purchases. This is to ensure that everyone can enjoy the same discount.
However, mobile operators did not reduce tariffs, but stopped generous subsidies and maintained monthly fees at a higher level, resulting in higher profits. This has led critics of the law to call for the lifting of subsidy restrictions for many years and demand that mobile operators freely set subsidy levels.
When the plan to lift the subsidy cap was announced earlier this year, the government accepted criticism that the regulation limited opportunities to purchase equipment at low prices due to reduced active competition.
The company added that the current focus is on high-end models, and the continuous rise in smartphone prices means it is time to re-examine the Mobile Device Distribution Improvement Act.
“We believe that with the recent rise in smartphone prices, it is time to reduce the cost burden of purchasing mobile devices,” Yonhap News Agency quoted a government official as saying in January
According to reports from South Korean media in early February, subsidy restrictions have been lifted.
According to industry insiders cited by the Korean Central Daily News, mobile operators are now providing subsidies of 55000 Korean won ($41.33) to 500000 Korean won ($370) for the new Galaxy S24 based on users’ mobile plans.
The upper limit of subsidies provided by the South Korean government to operators was 240000 Korean won (equivalent to 178 US dollars).
According to the latest global mobile data pricing statistics compiled by In Asia (excluding the Near East), South Korea has the highest mobile data cost at $5.01 per gigabit, followed by the British Indian Ocean Territory ($4.44), and then Japan ($3.48). The global average price is $2.59 per Gb.
However, Kim Yong jae, a business professor at Hankuk University of Foreign Studies, said that communication costs in South Korea are not as expensive as some other developed countries such as the United States, Germany, Sweden, and Japan.
The Korean Herald quoted Kim as saying, “Telecommunications fees in South Korea cannot be said to be cheap, but they are not too expensive. Overall, they are around the average level. Especially when used in conjunction with wired products, South Korea’s charging level is relatively low.”
According to the media report, Professor Park made the above remarks at a forum hosted by National Power Party member Kim Young sik in September.