South Korea Cuts Interconnection Charges

South Korea's Ministry of Information and Communication has ordered SK Telecom to cut the interconnection charges that it applies to calls from the other two cellular networks. Both of those networks, LG Telecom and KTF are also ordered to lower their charges, but by a lower margin. SK Telecom's interconnection charge is to be cut by 28%, with KTF seeing a fall of 18.6% and LG Telecom seeing a fall of 10.3%. The cuts come into effect in a couple of weeks.

SK Telecom is expected to see its net profit fall by nearly 13% over the next twelve months due to the cuts. LG Telecom has been calling for the cuts, claiming that SK Telecom was able to generate cost savings from its larger network that were then not being passed on to customers and connecting networks, resulting in excessive profits.

Several countries are putting pressure on interconnection charges, with reviews occurring in the UK and Europe wide from the EU. Last week, The Netherlands ordered cuts in its mobile networks interconnection charges.'"

Posted to the site on 3rd April 2002