Ministry of Science and ICT Approves SKT's '5G Mid-Tier Plan'... Telecom 3 Companies' Price Competition Intensifies

SKT to Launch New 5G Plans Next Month with Significantly Increased Data Benefits

[Asia Economy Reporter Lim Hye-seon] On the 29th, the Ministry of Science and ICT approved SK Telecom's new 5G plan, known as the 5G mid-tier plan. Accordingly, SKT will launch the new 5G plans on the 5th of next month.

Increased Data Allowance and Additional Benefits

SKT has filed a total of five new plans. Tailored to customer usage patterns, SKT supplemented previously unavailable data tiers for small (8GB) and medium (24GB) usage and newly added an unlimited data tier with differentiated additional benefits. Two corresponding online plan tiers for small and medium data usage were also added. SKT set the medium tier data allowance at 24GB based on the average monthly data usage of the bottom 99% of 5G users, excluding the top 1% heavy users.

SKT’s 5G plans, previously divided into 10GB (55,000 KRW) and 110GB (69,000 KRW) tiers, are now segmented into '8GB for 49,000 KRW (Basic)', '24GB for 59,000 KRW (Basic Plus)', and 'Unlimited for 99,000 KRW (5GX Prime Plus)'. Additionally, the existing 55,000 KRW plan will increase its data allowance by 1GB to 11GB at the same price. The 5G online plans, which previously only had 10GB (38,000 KRW) and 200GB (52,000 KRW) options, will now include '8GB for 34,000 KRW' and '24GB for 42,000 KRW' tiers.

According to Article 28 of the Telecommunications Business Act, telecom plans are subject to a notification system, but for SKT, the dominant player in the mobile market, the Ministry can reject notifications if they violate the Act’s provisions such as harming user interests or fair competition. Accordingly, the Ministry of Science and ICT reviewed the impact on user benefits and fair competition and consulted experts.

Ministry of Science and ICT: "Effect of Reducing User Fee Burden"

The Ministry of Science and ICT explained, "From the perspective of user benefits, this notification introduces five new plans that expand choices for users with small, medium, and large data usage, alleviating the communication cost burden for users consuming 8GB or less and those between 11GB and 24GB. The introduction of the medium tier reduces the data allowance gap between tiers compared to before. The online plans, which can be used about 30% cheaper without a contract, were also notified together, contributing to reducing user burdens." Users consuming 8GB or less can save about 6,000 KRW per month, and those between 11GB and 24GB can save about 10,000 KRW monthly. From a fair competition standpoint, SKT plans to wholesale the small and medium tiers to MVNOs, which will help resolve negative impacts on competition with mid- to low-priced MVNO operators.

SKT stated, "We reorganized the 5G plans into closely spaced tiers with 10,000 KRW intervals reflecting diverse customer usage patterns. The 'Basic' plan meets the demand of customers who want economical usage, and the 'Basic Plus' plan considers customers’ data usage trends." They added, "The newly introduced unlimited plan, '5GX Prime Plus,' features enhanced lifestyle-oriented service benefits. Early online subscribers will also receive additional data for one year."

With SKT’s launch of the new 5G plans, price competition among the three major carriers has intensified. Following SKT, KT and LG Uplus are expected to launch their 5G mid-tier plans soon. KT is likely to unveil its new 5G plans as early as next week. LG Uplus will also release new plans within next month. KT and LG Uplus are reportedly preparing more cost-effective plans than SKT to enhance competitiveness.