South Korea govt urges telcos to lower fees

The South Korea government wants mobile carriers to lower their rates and reduce their marketing costs to avoid "overheated" competition in the market.

The call came from Choi Mun-kee, minister for Science, ICT and Future Planning, who met with the heads of the three telcos, according to Yonhap News in a report on Monday. The three carriers comprise SK Telecom, KT and LG Uplus.

Choi said he wanted the carriers to cooperate in cutting phone bills to keep a lid on living costs, in light of the sluggish economy.

The minister also pointed out marketing costs by the three telcos rose 50 percent on-year in the first quarter of the year, which could have instead been invested in technology development and network upgrades.

The government has been pushing local telcos to cut their rates. This was part of President Park Geun-hye's election campaign promises last December as part of efforts to ease the financial burden on households.

Yonhao noted the ministry had earlier announced plans to get carriers to phase out sign up fees by 2015, which currently ranges from 24,000 won (US$21) to 39,000 won (US$34.50). This potentially could cut charges by around 500 billion won (US$443 million) annually. The three telcos have commited to cut the fees by 40 percent from this August, said the report.