South Korea to raise subscription discount to 25%

The South Korean government plans to increase the mandated monthly telecoms subscription fee discount to 25% from 20% as part of a plan to reduce total household expenses by 4.6 trillion won ($4.03 billion) annually.

Customers signing up for one or two year subscriptions will be able to choose to apply the discount as either a monthly rte cut or a one-time discount on a new smartphone purchase.

The market’s operators will also be required to provide an extra 11,000 won discount on monthly fees for elderly and low-income Koreans.

A plan unveiled by the government will also involve the establishment of more Wi-Fi access points at schools, public buildings and public transport lines.

But the plan has excluded an earlier proposal to abolish the 11,000 won basic mobile service fee to further reduce costs for consumers, due to strong opposition to the plan from the industry.

According to the report, the economic committee of the nation’s State Affairs Planning Advisory Committee believes that increasing the discount rate for subscription services and low-income customers has the same effect as the proposed abolition of the fee.

The mandated increased discount rate is expected be introduced in September, but could face legal and other challenges from operators.

The government reportedly also intends to reduce mobile network lease rates for MVNOs and abolish the current cap on handset subsidies to make purchasing smartphones more affordable.