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South Korea's major phone carriers are starting to take action against free phone and text services, which saw drastic growth with the spread of smartphones. Instead of hostile responses such as charging a network usage fee or blocking the services altogether, however, these carriers are adapting to the new market changes to maximize profits.

LG Uplus launched its independently developed application, U+ 070, at the end of last year. This mobile Voice over Internet Protocol (mVoIP) service allows free calls among those who have downloaded the application on smartphones. The application is provided on domestically manufactured smartphones such as Optimus Q, Optimus One, and Galaxy U, and can also be found in Apple's App Store and Google's Android Market. The free mVoIP service is available to everyone who downloads the app, including non-members to LG Uplus.

"By not placing a limit on access to services, the application gains popularity on a wider scale, even among clients of rival companies. This will eventually bring in real profits through mobile advertisements and the likes," the company explained.

KT, on the other hand, is actively joining forces with Kakao Talk - one of the most popular free mobile messenger services in Korea - by using the mobile platform service to sell Gifti SHOW, a mobile gift certificate. Sales of the Gifti certificates have been rising at a 20% rate each month, playing a hefty role in KT's mobile commerce profits. Meanwhile, Samsung Electronics is rumored to be planning a mobile messenger similar to Kakao Talk.

SK Telecom, which is under obligation to supply networks to mobile virtual network operators (MVNOs), is carrying on negotiations with MVNOs while also reviewing the option of directly entering the MVNO business through its sibling company, SK Telink, to compete against rival MVNOs.

[Written by Ji-hae Hwang - Samji Chung / edited by Soyoung Chung]

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]