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Telecoms face pressure to lower roaming charges

Data use abroad can cost 200 times more than domestic rates
Oct 24,2017

In response to complaints from phone customers about hefty roaming charges, Korea’s mobile carriers are scrambling to reduce their service fees.

KT, the country’s second-largest telecom company, said Monday that it would lower rates for data use abroad by 87 percent, from 2.2 won per data packet to 0.275 won, equivalent to domestic data rates, on pay-as-you-go plans.

“We have come up with a series of diverse measures and products in an effort to ease households’ mobile fee burden from roaming services,” said Im Chae-hwan, managing director of wireless service at KT.

The announcement came two weeks after a lawmaker revealed during a legislative hearing that average roaming charges were 200 times higher than domestic service fees.

The revelation caused uproar among the general public.

In addition to lowering pay-as-you-go rates, KT added a new roaming plan that charges a fixed rate of 11,000 won ($9.70) per day. The plan includes value-added taxes and allows users to continue using data at a slower speed with no additional cost if they exceed the daily data limit. Those traveling in a group of up to three people can each get half off the fixed rate.

For emergencies, KT is allowing users to make a five-minute call for a flat fee of 3,300 won anywhere in the world. Before, a one-minute call from Europe would have cost the same price.

The new rates will apply to 176 countries, including the United States, China and Japan.

To make up for the reduced income from roaming fees, KT has doubled the cost of the most expensive monthly plan to 110,000 won.

The roaming issue was first raised by Rep. Kim Kyung-jin of the opposition People’s Party during a National Assembly hearing with telecom executives on Oct. 12.

During the hearing, Kim urged mobile carriers to reduce their roaming fees. In response, SK Telecom CEO Park Jung-ho said there was a limit to how much companies could lower charges, given the system is based on discussions with telecom partners in other countries.

Korean telecom companies have faced immense pressure to lower mobile fees ever since President Moon Jae-in took office on a wave of liberal support. The companies have sought to make up for reduced revenue by diversifying their businesses, changing their subscription models and trimming marketing expenses.

Last month, SK Telecom, the country’s largest mobile carrier, unveiled a roaming plan that allows up to five users to share 3 gigabytes of data for 55,000 won and 6 gigabytes for 77,000 won across 65 countries. Its analysis of roaming service in the past five years showed a group of two to three accounted for 56 percent of all travelers.

LG U+, the smallest carrier, has yet to unveil adjustments to its roaming services. Its least expensive plan caters to teenagers under 19 and older Koreans 55 and above, and charges them 5,500 won per day for unlimited data.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]