Park Yoon-kyu, Deputy Minister of ICT Policy at the Ministry of Science and ICT [Photo by Lee Seung-hwan]

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The government will diversify 5G thrifty phone plans to help reduce household telecommunication bills amid high inflation, which could lead to a mid-range plan of 30,000 won ($23) per month for 5G services, according to the Ministry of Science and ICT.

“There are 150,000 subscribers using 5G thrifty phones in Korea, but they account for only 0.56 percent of the total 5G subscribers, and therefore it is necessary to promote the 5G thrifty phone business to reduce household communication costs,” Park Yoon-kyu, Deputy Minister of ICT Policy at the Ministry of Science and ICT told Maeil Business on Tuesday.

“If the National Assembly extends the wholesale obligation rule for thrifty phones, the government will lower the wholesale price and significantly increase the number of 5G thrifty phone subscribers,” he explained.

Currently, there are about 7.26 million thrifty phone subscribers excluding those for the Internet of Things services, but most of them rely on 4G services that cost 20,000 won to 30,000 won per month. There are four plans for 5G thrifty phone subscribers but plans with 110 gigabyte of data or above cost more than the mid-40,000 won range per month, limiting the growth of thrifty phone users.

If a 5G thrifty phone plan with intermediate phone bills is released, 5G services with 20 GB to 30GB data, which is mainly used by Koreans, will be available at a fee in the mid-to-high 30,000 won range per month.

The thrifty phone wholesale obligation system designates SK telecom Co., the country’s No. 1 mobile operator, as the mandatory wholesale provider, allowing it to determine the resale price for thrifty phone providers each year.

When the thrifty phone market was born in 2010, SK telecom was assigned this duty to help thrifty phone operators with weak bargaining power. Since then, the regulation has been extended four times amid controversy, but it was technically suspended in September last year.

The government has argued that the regulation should be extended for the sake of small low-budget phone operators. The telco, however, says that the government’s interference in the private sector is excessive.

In response to the criticism of state meddling, the vice minister said that the three major telcos have not reformed their service plans for a long time while enjoying the oligopoly structure, and the public is burdened with high prices because the market principle is not working, emphasizing that “the government should step in to help people save on their bills.”