Nov. 2, 2009 (The Korea Times) -- By Kim Tong-hyung
Staff Reporter
Mobile carriers may be lowering voice rates but they are now seeking ways of encouraging subscribers to use more mobile data.
SK Telecom unveiled seven new differentiated plans Monday for premium and low-volume users, long-term subscribers and younger customers.
The company will also offer a variety of combined packages that offer voice, text-messaging, mobile data and third-generation (3G) and WiBro mobile broadband connectivity under a single bill at a discounted rate.
Since announcing plans to offer cheaper services in September, SK Telecom (NYSE:SKM) has been considering ways to develop new price structures that could contribute to strengthening the company's market position and improve average revenue per user (ARPU) through increased data usage, thus offsetting the possible decline in voice revenue.
Last month, SK Telecom announced plans to launch a new type of service called fixed-mobile substitution (FMS), which enables users to pick certain service areas where mobile calls will be provided at similar rates to voice over Internet protocol (VoIP) services.
FMS is considered a direct attack on KT, the country's biggest telephone company and broadband Internet provider, as it aims to eliminate the need for having mobile and fixed-line phones separately.
SK Telecom also plans to release Wi-Fi-enabled handsets for its FMS customers to provide them with premium data services.
"These seven new monthly plans are the first measure we are adopting since we announced plans to lower our consumer rates on Sept. 25. We will be introducing further measures," said Bae Joon-dong, who heads SK Telecom's marketing division.
The company introduced a number of rates that appeal to subscribers under long-term contracts and high-volume users.
SK Telecom subscribers on 12-month or 24-month contracts who pay more than 29,000 won per month could shave 3,000 to 22,000 won off their monthly bills under a new discount program.
High-volume users, who include self-employed and freelance professionals, could subscribe to the "No. 1 Rate," which provides 11,000 voice minutes at 110,000 won per month, and also offers the option of getting 40,000-won worth of text messages and 2-gigabytes of data usage for free every month.
The company is also providing cheaper prepaid monthly plans for low-volume users, lowering the voice rates from the previous 62 won to 48 won per 10 seconds, and also a new discount rate for adolescent users.
To encourage mobile data usage, SK Telecom offered new data fixed-rates, offering 100 megabytes of data at 10,000 won per month, 500 MB for 15,000 won per month and 2 GB for 19,000 won per month, cheaper than its previous rate of 23,500 won for 1 GB per month.
The company also introduced a monthly plan that allows users to access both its 3G network and WiBro mobile broadband services.
The competition in the telecommunications industry seems to be moving from handset subsidies to consumer prices, apparently under pressure from the government.
KT is betting heavily on a new type of Internet telephony service, dubbed fixed-mobile convergence (FMC), which allows users to switch between fixed-lines and mobile networks using a single handset.
Fixed-mobile telephony customers could use Wi-Fi-enabled mobile phones to access fixed-line networks when making calls at home or in the office, while accessing wireless networks on the move.
This clearly benefits users, as voice over Internet protocol (VoIP) services charge significantly less for voice minutes than conventional wireless services.
The telecommunication companies are expecting significant demand for fixed-mobile telephony from business users, such as start-ups looking to reduce telecommunications expenses.
LG Telecom is currently preparing to absorb LG Group's two other telecommunications units - fixed-line telephony operator LG Dacom and broadband provider LG Powercomm. Fixed-mobile telephony will be one of the key services released by the combined company, which will be launched in January next year, LG Telecom officials said.
The Korea Communications Commission (KCC) has been pressuring mobile carriers to lower rates in line with President Lee Myung-bak's campaign pledge to lower household spending on telecommunications services.
As part of the steps to ignite competition, KCC is also looking to introduce mobile virtual network operators (MVNOs) and mobile voice over Internet telephony (VoIP) carriers.
