With South Korea gearing up for the commercial launch of 5G services this March, mobile carriers are facing pressure from consumer activists to minimize prices.

During a meeting organized at the National Assembly with government officials and consumer activists, participants said while the mobile carriers have invested heavily in building their 5G networks, the cost could be offset by an increase in the total number of subscriptions. Some also recommended a new pricing system for non-data services.

Ahn Jin-gul, head of People’s Livelihood Economic Research Institute, said at the meeting hosted by ruling Democratic Party lawmaker Rep. Noh Woong-rae and officials from the Ministry of Science and Information and Communications Technology, that they could sell more plans by maintaining relatively low prices to maximize demand.  

“Data usage will dramatically increase as most people use smartphones to watch video clips and movies. In that regard, mobile carriers can afford to maintain the price of the current 4G services,” he said.

However he did not say where that extra demand might come from. South Korea’s current smartphone penetration rate is already at around 80 percent.

Some also suggested overhauling the pricing system to better fit modern cellphone usage, which leans more toward data-related services compared to voice calls.

Under the current price scheme of 4G LTE, subscribers are required to pay to use data to watch movies and talk on the phones. The activists suggested that the fee for using conventional telephone services should be lowered as most consumers spend more on data services.

“There is a demand for lowering mobile fees from users,” said Yoon Myeong, an analyst at Korean National Council of Consumer Group. “Everyone has the right to have fair and cheap access to telecom services.”

The ICT Ministry said the government would not interfere with the pricing of 5G services. Nam Suk, who deals with telecom policy at the ICT Ministry, said such a policy could disrupt the market.

While the country’s telecom giants have yet to come up with a price plan, some experts have predicted monthly bills could rise by 15,000 won ($13.26) compared to 4G services.

Some telecom firms suggested they are left with no choice but to raise prices for the extensive infrastructure they needed to install for introducing 5G services. They spent about 3.6 trillion won combined last year to purchase the rights to use certain frequencies for 5G services.

“It is true that we feel the pressure because companies have already spent 4 trillion won to 5 trillion won for long-term investments,” LG Uplus chief Ha Hyun-Hoi old reporters at the Consumer Electronics Show in Las Vegas in January.

(jasonyeo@heraldcorp.com)