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Press Release
SK Telecom has decided to pay a handset subsidy ranging from a minimum of KRW 70,000 to a maximum of KRW 190,000. Amounts will vary according to the subscribers’ service usage rates and subscription period.
Pursuant to a law that prohibits discrimination among subscribers who change their handsets or transfer to other service providers according to the number portability system, more benefits are expected to be given to the subscribers who want to change their handsets.
Pursuant to the Telecommunications Business Law that allowed for the payment of a handset subsidy to mobile phone users who subscribed to the same service provider for 18 consecutive months, SK Telecom decided to pay a handset subsidy ranging from a minimum of KRW 70,000 to a maximum of KRW 190,000, starting on March 27th. The amount of the subsidy will vary in accordance with each subscriber’s mobile phone usage records from the day of subscription to the present.
SK Telecom has divided monthly average revenue per user (ARPU) for the six months starting on the day of subsidy payments, into six stages. In doing so, the company will pay handset subsidies amounting to KRW 170,000 and KRW 150,000 to the subscribers whose ARPU level reached KRW 90,000 and KRW 70,000 respectively. If the subscribers’ ARPU reaches over KRW 50,000 and KRW 40,000, SK Telecom will pay KRW 130,000 and KRW 110,000 respectively. In addition, KRW 90,000 will be given to subscribers whose ARPU reaches more than KRW 30,000. For the subscribers whose ARPU comes to less than KRW 30,000, the company will pay a handset subsidy of KRW 70,000. SK Telecom will also make additional subsidy payments amounting to KRW 20,000 and KRW 10,000 to subscribers whose subscription period is for more than five years and three years respectively.
SK Telecom revealed that the differential amounts of handset subsidy will be paid in accordance with each subscriber’s ARPU. However, the benefits will be given to all subscribers as the company decided to also pay the subsidy to long-term subscribers.
Under this plan, a total of 13.45 million subscribers (69% of our entire number of subscribers) will receive the handset subsidy. SK Telecom will focus on existing subscriber retention approaches as it provides subscribers with a subsidy payment that is designed to sustain the same level of payments for subscribers who change their mobile phone service providers, and the handset subsidy for subscribers who only changed their handsets.
Previously, a variety of subsidies were given to both new or number portability subscribers who changed their service providers. Now, subscribers who only change their handsets can receive subsidies based on their mobile phone usage records and subscription period. Most notably, number portability subscribers had to pay an additional subscription fee to new service providers, while giving up their mileage benefits and discounts for long-term subscription that were offered by the previous service providers. Now subscribers can change their handsets and receive the same subsidy as the number portability subscribers, as well as maintaining their existing benefits.
The handset subsidy will be offered just this one time within the next two years (until March 26, 2008) to each customer who has subscribed to one mobile phone service provider for longer than 18 months. This subsidy policy will be applied to the customers who subscribed to other mobile service providers for longer than 18 months. Thus, KTF or LGT service subscribers can enjoy the same subsidy benefits as SK Telecom subscribers. In cases in which one subscriber is holding multiple subscriptions in his or her name, the subsidy will be paid to each subscription line if each of his or her subscription lines is qualified.
"The revision of the Telecommunications Business Law is aimed at offering more benefits to subscribers who have higher mobile phone usage rates. In this regard, SK Telecom’s handset subsidy policy is focused on giving benefits to long-term subscribers according to their subscription period and ARPU" said Hyung Keon Kim, vice-president of SK Telecom’s Marketing Division.
He also added, "Cutthroat competition such as the abnormal discount on handset purchases from mobile phone service providers will be terminated when the handset subsidy is given equally to subscribers who want to change their handsets or transfer to other services providers, according to the number portability system. We expect that sound competition in which people choose their service providers according to call quality or the offering of a variety of services, will be promoted in the mobile service market".
SK Telecom has divided monthly average revenue per user (ARPU) for the six months starting on the day of subsidy payments, into six stages. In doing so, the company will pay handset subsidies amounting to KRW 170,000 and KRW 150,000 to the subscribers whose ARPU level reached KRW 90,000 and KRW 70,000 respectively. If the subscribers’ ARPU reaches over KRW 50,000 and KRW 40,000, SK Telecom will pay KRW 130,000 and KRW 110,000 respectively. In addition, KRW 90,000 will be given to subscribers whose ARPU reaches more than KRW 30,000. For the subscribers whose ARPU comes to less than KRW 30,000, the company will pay a handset subsidy of KRW 70,000. SK Telecom will also make additional subsidy payments amounting to KRW 20,000 and KRW 10,000 to subscribers whose subscription period is for more than five years and three years respectively.
SK Telecom revealed that the differential amounts of handset subsidy will be paid in accordance with each subscriber’s ARPU. However, the benefits will be given to all subscribers as the company decided to also pay the subsidy to long-term subscribers.
Under this plan, a total of 13.45 million subscribers (69% of our entire number of subscribers) will receive the handset subsidy. SK Telecom will focus on existing subscriber retention approaches as it provides subscribers with a subsidy payment that is designed to sustain the same level of payments for subscribers who change their mobile phone service providers, and the handset subsidy for subscribers who only changed their handsets.
Previously, a variety of subsidies were given to both new or number portability subscribers who changed their service providers. Now, subscribers who only change their handsets can receive subsidies based on their mobile phone usage records and subscription period. Most notably, number portability subscribers had to pay an additional subscription fee to new service providers, while giving up their mileage benefits and discounts for long-term subscription that were offered by the previous service providers. Now subscribers can change their handsets and receive the same subsidy as the number portability subscribers, as well as maintaining their existing benefits.
The handset subsidy will be offered just this one time within the next two years (until March 26, 2008) to each customer who has subscribed to one mobile phone service provider for longer than 18 months. This subsidy policy will be applied to the customers who subscribed to other mobile service providers for longer than 18 months. Thus, KTF or LGT service subscribers can enjoy the same subsidy benefits as SK Telecom subscribers. In cases in which one subscriber is holding multiple subscriptions in his or her name, the subsidy will be paid to each subscription line if each of his or her subscription lines is qualified.
"The revision of the Telecommunications Business Law is aimed at offering more benefits to subscribers who have higher mobile phone usage rates. In this regard, SK Telecom’s handset subsidy policy is focused on giving benefits to long-term subscribers according to their subscription period and ARPU" said Hyung Keon Kim, vice-president of SK Telecom’s Marketing Division.
He also added, "Cutthroat competition such as the abnormal discount on handset purchases from mobile phone service providers will be terminated when the handset subsidy is given equally to subscribers who want to change their handsets or transfer to other services providers, according to the number portability system. We expect that sound competition in which people choose their service providers according to call quality or the offering of a variety of services, will be promoted in the mobile service market".