“Customers looking for economical rate plans increase due to recession”
Mobile carrier expands market share among cost-effective customers
Cheaper price compared to existing internet products
[아시아타임즈=이동욱 기자] Mobile carriers are continuously introducing low-price internet plans targeting customers who pursue rational consumption. As the burden of household communication costs increases due to the prolonged recession, the intention is to expand market share and increase profitability at the same time.
An LG U+ employee introducing the Nugget Light. (Photo = LG U+)
According to the internet industry on the 24th, mobile carriers are reducing unnecessary services and introducing practical rate plans one after another, targeting consumers who value cost-effectiveness.
LG U+ recently launched the Internet plan ‘Nugget Lite’. Nugget Light was a promotional plan that was first introduced last March under the name of ‘Direct Newlywed Promotional Internet Plan’ for newlyweds and couples planning to get married. As word of mouth spread that the benefits were excellent, inquiries from regular customers who were not eligible for subscription began to flood in. Accordingly, LG U+ reflected customer requests and officially launched the service so that all customers, not newlyweds, can use it while maintaining the same benefits.
The usage fee for each product is △23,100 won for 100M, △27,500 won for 500M, and △33,000 won for 1G when combining IPTV with a 5-year contract. Unlike the existing rate plan, which allowed up to 3 years of contract period, the contract period can be extended to up to 5 years, lowering the monthly fee for the 1G plan to up to 6,600 won.
SK Broadband launched the ‘Instant Discount Plan’, which provides discounts on TVs, air purifiers, etc. in lieu of prizes.
Customers can receive a discount of 14,300 won per month for 3 years when they simultaneously subscribe to Giga Internet and B TV Standard on a 3-year contract. The discount is also extended when the contract is renewed, and the bill savings effect is even greater if you sign up for SK Telecom’s wired/wireless combination product at the same time. There is no discount refund for the additional discount amount, and customers can enjoy more benefits as a rate discount than customers who receive a prize when renewing their contract.
In addition, the discount refund calculation method for ‘Hilan’, a PC room exclusive product for newly subscribed cable Internet users and small business owners, has been changed. Previously, the discount refund was accrued until just before contract expiration, but in the future, the discount refund will gradually decrease from the point where half of the contract period has passed, becoming 0 won at the time of contract expiration.
The reason behind the mobile telecommunications industry’s launch of low-priced internet plans is the increase in single-person households and the decline in consumption due to the long-term recession. In particular, young people have a high need to reduce communication costs due to unstable employment and excessive housing costs.
According to Statistics Korea, the number of single-person households in Korea has exceeded 5 million households in 2015, 6 million households in 2019, and 7 million households in 2021, and currently reaches approximately 8.045 million households, accounting for 36% of all households. Household average monthly communication costs decreased by about 22% from 128,000 won in 2012 to about 100,000 won in the first quarter of this year. This shows that each household has consistently prepared self-help measures to lower the burden of communication costs.
An official in the telecommunications industry said, “Due to the continuing recession, the number of customers looking for affordable rate plans that exclude additional features is increasing,” and added, “We plan to lower the burden of monthly telecommunication fees and attract users by meeting the diverse needs of customers.”
