Mobile carriers under pressure to cut fees as marketing costs fall

South Korea's three mobile carriers have been under pressure to cut fees as a law helps them save about 310 billion won ($269.2 million) in marketing spending last year, according to a consumer advocacy group Thursday.

The Mobile Device Distribution Improvement Act came into force in October 2014 with the aim of keeping fierce competition to woo customers with hefty subsidies in check.

(Yonhap)

The law had originally been designed to benefit customers by eliminating illegal subsidies, but critics say it has only helped SK Telecom, KT and LG Uplus reduce their marketing costs.

According to an industry estimate, the combined marketing costs of SK Telecom, KT and LG Uplus fell to 7.55 trillion won last year, compared with 7.86 trillion won in 2015.

This week, KT said its marketing spending last year declined by about 100 billion won. LG Uplus said Thursday its marketing costs fell by 47.1 billion won in 2016.

SK Telecom is slated to reported its earnings for last year Friday. Brokerages have expected SK Telecom to cut its marketing spending by about 160 billion won last year.

Yoon Moon-yong, a director of ICT policy at the Green Consumer Network in Korea, a consumer advocacy group, said, "Mobile carriers are expected to continue to improve their earnings in the future.

"It is time for telecom fees to be cut," Yoon said. (Yonhap)