SK Telecom Slashes Mobile
Phone Family Rates by up to 50%

Prompts voluntary price war among mobile carriers

SK Telecom has announced a plan to slash its mobile phone family basic and calling rates by up to 50 percent. The nation's top mobile carrier's voluntary rate cuts come amid reports of President-elect Lee Myung-bak's transition team's attempt to reduce mobile phone rates. SK Telecom's voluntary rate cuts are expected to prompt other rival carriers to reduce mobile phone rates in what is seen as a virtuous cycle of rate cuts, mobile carriers and industry experts say.
The plan calls for a cut of intra-network calling rates for long-term subscribers by up to 80 percent.
In fact, SK Telecom introduced services with intra-network discount rates for the first time last year, prompting rival carriers to follow suit by slashing short message service (SMS) rates.
On Feb. 4, SK Telecom decided to introduce a discount system for family subscribers, widen discount rates for intra-network calls for long-term subscribers and introduce products based on dramatic competition-inducing rates, including rates combining mobile and fixed line products beginning in early March on a gradual basis.
SK Telecom's decision to introduce competitive products following the new government's policies designed to ease restrictions on competition is expected to create a new climate for a full-blown acceleration of the price cut war.
Effective in April, SK Telecom will implement the "T-to-T All-Family Discount System"calling for a reduction of domestic voice and image calling rates by up to 50 percent. Each registered family member will have his or her mobile basic rate reduced by 10 percent to 50 percent according to the initial subscription year while domestic voice and image calling rates among family members will be reduced by a uniform 50 percent. SK Telecom subscribers who receive a 50 percent discount rate under the existing T-to-T All-Family Discount System will be given five hours of calling free of charge monthly.
In early March, SK Telecom will introduce the "T-to-T Plus Discount System"calling for reducing intra-network calling rates for long-term subscribers of more than two years by up to 80 percent. Mobile carriers, including SK Telecom, have so far offered discount intra-network calling rates regardless of subscription period, but the T-to-T Plus Discount System is aimed at giving a higher discount to longer-term subscribers -- 65 percent discount for those who have been subscribers for two or more years; 70 percent for more than three years, 75 percent for more than five years and 80 percent for 10 years or more.
SK Telecom plans to release a new product under the "Data Perfect Uniform Rate System"calling for a reduction in annual uniform rates in order to cut the financial burden to mobile internet users.
SK Telecom plans to release a new package product of mobile calling, intra-city calling, broadband internet and broadcasting services like Hana TV and TU that will allow effective price cuts after the mobile carrier gets the green-light from the new government to acquire hanarotelecom. nw

SK Telecom CEO Kim Shin-bae

SK Telecom Gets the Nod to Acquire Hanarotelecom
However, government approval comes with conditions
The government gave a nod to SK Telecom's acquisition of Hanarotelecom, the nation's second largest fixed line telecommunications provider, allowing the top mobile carrier to expand into the broadband market.
The Information and Telecommunications Policy Deliberation Committee under the umbrella of the Ministry of Information and Telecommunication approved SK Telecom's purchase of a controlling stake in Hanarotelecom on four conditions, citing fears of undermining fair competition.
The conditions the government attached in return for its approval of SK Telecom's acquisition of Hanarotelecom include the building up of the Broadband convergence Network (BcN) in rural areas; allotting mobile telecom re-sales to non-subsidiary companies in advance; the banning of the forced sale and unfair refusal of bundled products; and the improvement of the wireless internet connection system. SK Telecom is required to submit action plants on the attached conditions.
After acquiring the go-ahead at its shareholders'meeting slated for next month, SK Telecom is to take over a 38.98 percent of Hanarotelecom from the AUG-Newbridge Consortium for 1,087.7 billion won. The acquisition will raise SK Telecom's interest in Hanarotelecom from 4.7 percent to 43.59 percent.
Earlier, the Fair Trade Commission gave a green light to the deal, but ordered to implement conditions designed to ensure fair competition in the telecommunication market. The antitrust watchdog requested that SK Telecom share its 800 MHz frequency bandwidth with its rival mobile carriers, saying SK's exclusive use of the spectrum could undermine fair competition in the mobile telecom market. nw