Korea - Regulator is considering making SMS free to help reduce inflation

[telecom asia] South Korea’s regulator is pondering offering consumers free text messages as a way of curbing inflation in the country.

Choi See-joong, chairman of the Korea Communications Commission (KCC), had said Wednesday that free text messages and cheaper mobile phones direct from handset vendors may be in the pipeline as a means of lowering telecommunications costs, according to the Chosun Ilbo.

Telecommunications costs per household have reached as much as 100,000 won ($91.80) per month, according to the KCC.

The hints by Choi appear to not have sat well with operators and telecoms stakeholders alike. An official from one of the country's three telecoms providers told the Korea JoongAng Daily that the firm had not been consulted before the proposal, adding the KCC's demands were 'hardly feasible'. The country’s three telecom firms are Korea Telecom (KT), SK Telecom and LG U+.

One shareholder from one of the country’s three operators told the Korea Herald that the firms were private entities, and she did not wish to see the company’s value depreciating due to the government’s laws.

The same shareholder also questioned how overseas shareholders in the country’s three telecoms firms would react to Choi’s statement.

Another industry official told the Korea JoongAng Daily that the provision of free text messages would encourage spam and limit operators' ability to innovate due to revenue loss.Data from Korea’s Information Society Development Institute had estimated that revenue from text messages would account for about 4% of an operator’s total sales.

South Korea’s carriers are currently also struggling with the popularity of free mobile messengers that use data for communication, such as Kakao Talk and WhatsApp. An SK Telecom official told the Korea Herald end-March that mobile messaging applications had impacted the firm’s network.

The country’s three carriers are also involved in a price rigging probe by Korea’s Fair Trade Commission.

A taskforce from the KCC dedicated to finding means to lower communications costs is expected to announce its finalized plans later this month.

Korea regulator ponders free text rules