We evaluate the current rate system of Korean wireline telephony, and propose relevant remedies for more efficient and competitive market. Despite its importance in telecommunications market, wireline telephony and especially its rate system have been largely neglected by policy makers. Price-cost disparity in local telephony distorts investment incentives, spreads inefficiencies to other market segments through undesirable cross subsidy and weakens competition. We propose as specific policy goals rate rabalancing in local and long-distance telephony, separation of business and residential rates, lower rate sensitivity to distance, intensified measures to encourage local competition.

This text is in Korean. If you wish to access this file, please go to the Korean site and register. Thank you