South Korea to SK, KT, LG: Cut prices of phone plans

The South Korea’s mobile carriers, SK Telecom, KT, and LG Uplus reportedly are caught in a squeeze between government pressure to lower phone bills and concerns about reduced network investment. Aaccording to a report in The Korea Times, the Yoon Suk Yeol administration wants to ease the burden on households by pushing for cheaper plans and benefits for low-income groups. The carriers are said to have have responded with new options, including allowing users to choose between 5G and slower LTE services and offering a low-cost 5G plan.

However, with general elections approaching (April 10), the government’s pressure has intensified, raising concerns about political influence on market regulation. Industry experts worry that lower prices could limit the carriers’ ability to invest in network upgrades, potentially impacting future competitiveness.

This tension highlights the trade-off between affordability and network quality. While cheaper plans benefit consumers in the short term, reduced investment could hinder the development of essential technologies like AI and 6G. “The telecommunications business essentially requires a lot of capital investment, such as network equipment investments. While it is natural to align with government policies, support for measures that can invest more in the transition to the AI era, preparation for the upcoming 6G network and new businesses, such as air mobility and self-driving cars, are also needed,” an official in the telecommunications industry said on condition of anonymity

The Korea Communications Commission (KCC) has also entered the fray, urging mobile carriers and phone makers like Samsung and Apple to offer higher subsidies for users switching providers. This aims to boost competition and further lower prices. “During the meeting, the chairman specifically requested the operators’ special cooperation regarding the recently introduced policy of support funds for switching to alleviate the burden of household communication expenses and to vitalize competition,” the KCC reportedly said. Support funds for switching refers to a system where mobile carriers can provide subsidies when consumers switch carriers upon purchasing new phones. It is designed so that users who subscribe to expensive monthly plans can receive more subsidies. “We requested the mobile carriers and mobile phone manufacturers to expand the subsidies, and they promised to actively cooperate,” Pan Sang-kwon, director of government affairs at KCC said, after the meeting.

The carriers have agreed to increase subsidies, but industry officials argue that long-term network health requires continued investment.