The government called on the nation's three mobile carriers Monday to lower mobile rates and households' communication bills as well as reduce their marketing costs which could lead to "overheated" competition in the market.
During a meeting with the heads of the three mobile operators, Choi Mun-kee, the minister of science, ICT and future planning, said he wants the companies to cooperate in reducing phone bills for households. The three operators are SK Telecom Co., KT Corp and LG Uplus Corp.
The minister also expressed worries that marketing costs spent by the three firms increased by up to 50 percent on-year in the first quarter of the year, which is money that otherwise could have been invested in technology development and network upgrades.
The government has been encouraging local mobile operators to cut mobile rates, which are burdensome to households amid stagnant economic situations.
The government earlier announced that it will allow so-called mobile virtual network operators (MVNOs) to sell mobile phone services through the country's state-run postal service provider starting from September.
MVNOs borrow networks from existing mobile carriers at wholesale prices, allowing them to offer their services at cheaper rates compared to existing mobile operators due to not having to spend large amounts of money on big buildings to house their own mobile networks, a huge barrier for new players entering the market.
Also, the ministry said earlier it plans to prod local mobile operators to phase out sign-up fees for mobile phone services by 2015. The fee currently ranges from 24,000 won (US$21) to 39,000 won. The ministry expects the abolition of mobile subscription fees to cut mobile charges by around 500 billion won annually.
The three mobile operators said they will cut sing-up fees by 40 percent starting from August this year.
During the December presidential election campaign, President Park Geun-hye promised to abolish mobile phone subscription fees as part of an effort to ease financial burdens on households.
South Korea has witnessed an explosive growth in smartphone users with its smartphone population topping the 30 million mark in August last year.
The number of smartphone users who opted to connect their smartphones to the faster mobile network, called long-term evolution (LTE), also topped the 20 million mark early this month, just 20 months after the service was introduced in the country, previous data showed.