South Korea approves 5G pricing plans

The South Korean government announced Friday it had approved mobile carriers’ pricing plans for fifth-generation wireless networks, with the third-biggest telecom company, LG Uplus, revealing that its pricing will start from 55,000 won ($48) per month. 

According to the Ministry of Science and ICT, the government has greenlighted SK Telecom’s pricing for 5G services. SK Telecom is the only mobile carrier required to obtain the government’s approval for new pricing plans. 

While the details of SKT and KT’s pricing plans will be kept under wraps until they hold a press conference early next week, LG Uplus said the pricing scheme will start from 55,000 won per month for 9 gigabytes.

“Combined with our initiative in pricing plans and distinctive contents for 5G network, we will accelerate our efforts to lead commercial rollout of 5G,” said LG Uplus’s Vice President Hwang Hyun-sik. 

South Korea has been seeking to become the world’s first country to offer commercial service for 5G network. Samsung Electronics said last week its first 5G-powered smartphone, Galaxy S10 5G, will hit the market on April 5.

The other pricing plans from LG Uplus are 75,000 won per month for 150 gigabytes and 95,000 per month for 250 gigabytes. If users subscribe to the 95,000 won plan by June, they will be provided with an additional 1,000 gigabytes every month for free, LG Uplus said.

As the country's biggest mobile carrier, SKT has been under pressure to come up with a cheaper pricing model. Earlier this month, the government rejected the company’s original pricing plan, criticizing it for “restricting consumers’ choice.” 

During a meeting with shareholders Tuesday, SKT Chief Park Jung-ho hinted that the company’s 5G pricing plan would start in the range of 55,000 won per month following the government’s proposal.

“There was request for a pricing plan in the range of 55,000 won (from the government). We are about to wrap up the discussion,” said Park.

However, consumer activist groups have continued to take issue with the possibility that consumers may end up with hefty bills for use of the next-generation network. Combined with the cost of new 5G smartphones, a consumer could pay up to 20,000 won more than a current 4G Long Term Evolution plan. 

According to industry watchers here, SKT’s pricing plan is expected to consist of four parts: 55,000 won for 8 gigabytes; 75,000 won for 150 gigabytes, 95,000 won for 200 gigabytes and 125,000 won for 300 gigabytes. 

Given that the price of Samsung’s first 5G smartphone, the Galaxy S10 5G, would be set around 1.4 million won, a consumer advocacy group argued that the hyper-speed network may not be accessible to low-income households. 

“Those who spend 30,000 to 40,000 won on telecom bills would not be able to use 5G network services,” said People’s Solidarity for Participatory Democracy. “It is the worst pricing plan in the era of worsening income disparity.” 

Telecom firms have said that they are compelled to raise prices as a result of the extensive infrastructure they needed to install for the introduction of 5G services. They spent about 3.6 trillion won combined last year to purchase the rights to use certain frequencies for 5G services.

Industry watchers said while the average price per unit of data would decrease, thanks to the increased amount of data delivered via the ultrahigh speed network, the overall price of 5G services could initially be higher than existing services, as companies seek to recoup the costs of establishing the new networks.

SKT chief Park told reporters if 5G subscribers were to use the same amount of data as 4G subscribers, 5G would be cheaper by up to a third. The 5G network is expected to be up to 20 times faster than 4G, allowing users to download high-definition movie in a few seconds.