South Korean Telcos Get OK to Charge Extra for Mobile VOIP Apps

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In a move that has critics crying that it is ignoring net neutrality principles, the Korea Communications Commission said last week that it will let three local mobile operators, SK Telecom, KT and LG U+, charge users extra fees for VOIP applications or block their use entirely.

Korea's top mVoIP app, KakaoTalk, has gained rapid popularity among smartphone users. Other players in the mVoIP market include Microsoft's Skype, Google Voice, Fring, Line 2 as well as other independent and operator-driven services, according to Infonetics Research.

With widespread use of these mobile applications adding data traffic and cutting into their text and voice profits, the major Korean operators have decided to raise prices for data usage. And as the country's regulator is allowing the telcos to charge for use of apps such as KakaoTalk, some are claiming that this is a violation of net neutrality rules.

"This will set a precedent for coming apps such as FaceTime, where SKT and KT already said they will apply the same pricing policy as with local apps, and this can clash with global players like Apple and Google," said Jiho Park, an activist with the Citizens' Coalition for Economic Justice.

Apple's FaceTime is only available on Wi-Fi networks now but with iOS6 this fall, people will be able to use it over 3G or 4G LTE, too.

SK Telecom and KT currently offer unlimited data plans, which allow users to freely download apps on their networks, whereas LG U+ used to block over-the-top programs entirely.

The companies have not yet released specific information on their new rates.

KakaoTalk has 36 million Korean users and 9.2 million international users. More than half of 50 million Korean cell phone owners use smartphones, according to the Korea Communications Commission.

The Korean government released its open Internet guidelines last year, designed after the U.S. network neutrality rules released by the Federal Communications Commission last year. Under these principles, consumers can make their own choices about what applications and services to use and what content they want to access, create or share with others.

Unofficially, the KCC has already permitted telecoms to enact policies of their choice regarding third-party apps, experts say.

"[The government's policy] is against the market rule, if there's a foul play, it should regulate for fair competition and help innovation to grow," said Jae Yeon Kim, a tech columnist and an author of "Being Social Web."

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