Korea tells SK Telecom to lower rates

SK Telecom corners over half of Korea's cell-phone calls, so the gov-ernment hopes to boost competition

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SEOUL, South Korea (CNN) -- The South Korean government will force leading cell-phone carrier SK Telecom to lower rates next year.

SK Telecom will reduce charges by an average 7.3 percent starting January 1, cutting its basic phone service charge by 1,000 won per call and by 1 won for each 10 seconds.

The Ministry of Communication and Information finalized the rate cut over the weekend during a meeting designed to promote stable living conditions over the northern winter.

It is also aimed at promoting competition, with SK Telecom cornering more than 50 percent of the country's cell-phone calls.

"The move is embarrassing given we have already cut rates 8.3 percent this year," SK Telecom said in a statement.

SK Telecom shares are down 1.24 percent on Monday afternoon, to 239,000 won, contributing to a 0.7 percent slide in the broader market.

In late October, SK Telecom was slapped with a 30-day ban from signing up new customers, for offering illegal handset subsidies.

The government watches the pricing of handsets sold by cell-phone services after it decided Koreans were changing their cell phones too often, hurting the economy with unnecessary spending.

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