Election pledges threaten South Korea's telcos

Campaign pledges to cut telecom prices made by both ruling and opposition parties in the run-up to South Korea's presidential election could harm the nation's telecom sector, industry players have warned.
 
The sector is concerned it will face combined revenue losses running into the trillions of won no matter which party wins the December election, the Korea Herald reported, citing several industry sources.
 
The in-power Saenuri Party has promised to cut mobile voice call rates by 20%, and discount or imported handset prices by 20%.
 
Industry estimates suggest that this policy could cost mobile operators a combined 1 trillion won (€674 million) in revenue
 
The party has also promised to ensure that operators offer unlimited LTE data plans, a decision that could have an even larger financial impact on operators.
 
Meanwhile the main opposition Democratic United Party has made its own election promises, including the abolishment of basic charges, free text messaging and public Wi-Fi networks. The estimated potential financial impact of this would be 7 trillion won.
 
The Herald's sources, who declined to be named, appear concerned that the lost revenue could have a devastating impact on the telecom sector. One source complained that politicians are making decisions on telecom matters without having any “insight about the telecom industry at all.”
 
KT and SK Telecom have both already ceded to pressure from the government to cut their respective mobile rates.

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