South Korea’s three mobile carriers - SK Telecom Co., KT Corp., and LG Uplus Corp. - could be forced to disclose their accounting books including cost structure as early as at the end of the month in compliance with Thursday’s Supreme Court ruling.
The highest court upheld a ruling by a local high court, saying that “given the everyday impact of wireless services, operators have the public role to uphold fairness and reasonableness in rate charges” and ordered them to share the information with the public.
The news hit hard on wireless carriers as exposure of the cost to revenue ratio could eat into their profitability and weigh on their future competitiveness. Civilian activist groups have been demanding cuts in wireless service rates if cost to revenue ratio passed the breakeven point, claiming the operators were charging beyond their investments.
SK Telecom shares finished Friday 2.18 percent lower at 224,000 won ($209.2), KT Corp. 2.91 percent at 26,700 won, and LG Uplus 4.42 percent at 11,900 won.
The Ministry of Science ICT said it would respect the final ruling and take actions to ensure transparency in wireless fees. Lowering mobile fees had been one of President Moon Jae-in’s campaign promises.
The disclosure is restricted to between 2005 and 2011 when services were in 2G and 3G as the suit by the People’s Solidarity for Participatory Democracy was filed in 2011. The group is expected to press for disclosure beyond 2011.
The industry strongly contests to the ruling, claiming no private corporation in a free market system is forced to disclose costs that define the competitiveness of an enterprise.
By Seo Dong-cheol and Lee Eun-joo
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]