LG Uplus building in Yongsan, Seoul [Courtesy of LG Uplus]

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LG Uplus Corp. introduced an unlimited online data plan that is the lowest among the country’s three major telecommunications companies in what appears to be a response to the government’s efforts to reduce household communication costs.

The new online plan, which allows unlimited data to be used for 59,000 won ($45) per month as part of a promotion until April, provides the benefit of using the unlimited 5G plan for 45,000 won per month from the second subscriber if two or more join the plan together.

Unlimited 5G data rate plan is around 80,000 won and even if a subscriber receives a contract discount, the monthly fee is in the mid-to-late 60,000 won. The online rate plan refers to a plan that opens communication directly by receiving a sim card through courier without visiting a mobile carrier’s branch.

In a related development, the government and the three telecommunications companies are discussing ways to reduce household communication costs and expand consumer options. Within the first half of this year, a new rate plan for 40 gigabyte to 100GB of 5G data is expected to be released in the 60,000 won range and in the 50,000 won range when contract discounts are applied.

In addition, a new plan for seniors aged 65 and over, which can be used for 20,000 won per month, and a low-cost 5G exclusive affordable phone plan will be released. Payment methods will also vary from the existing monthly payment to quarterly and semi-annual payment.

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According to Statistics Korea, domestic households’ communication costs increased to 131,399 won in the third quarter of 2022 from 119,775 won in 2020. In this regard, the government is taking active action to help reduce the communication costs, which have snowballed following the introduction of 5G.

Other telecommunications companies, such as KT Corp., are also preparing to increase discount benefits. A KT official said, “We are considering a new rate plan that provides combined discounts to online rates.”

Late last year, SK telecom Co. introduced a combined discount service to its online plan for the first time in the industry. For subscribers with 30 years or more on a combined basis, a 30% discount for the whole family is applied, allowing them to use unlimited 5G rates for 43,400 won.

However, there is still considerable criticism among consumers of the telecommunications market’s oligopoly system in which there is no distinction between the three telecommunications companies in terms of data usage and price.

The government is also reportedly asking the three telecommunications companies to provide consumers more choices, including by offering 20GB to 30GB of data per month in the 30,000 won range per month.