LG Uplus critical about Kakao’s free voice services

It was just months ago when LG Uplus CEO Lee Sang-chul called for mobile-phone carriers to embrace the free voice calls pushed by Kakao Talk, an immensely popular smartphone messaging service.

Now, Lee sounds less impressed with Kakao’s mobile voice over Internet protocol (VoIP) offerings, criticizing the voice quality and predicting that the popularity of the service will be short lived.

While SK Telecom and KT saw Kakao as a threat right from the start to their already declining voice services, claiming they will have to raise monthly consumer rates to compensate for the losses, LG Uplus, the smallest of the three carriers, had maintained a softer stance.

The carriers are now focusing on launching their own VoIP services over fourth-generation Long Term Evolution (LTE) networks, and Lee believes this could render Kakao’s voice services irrelevant.

“Eventually, mobile VoIP services will fully blossom, but there will be voice quality problems along the way. The upcoming LTE-based VoIP services will be a significant improvement,’’ Lee told reporters recently on the sidelines of a forum on Jeju Island.

A month ago, LG Uplus decided to allow its subscribers to access Kakao’s free call service as part of their existing data subscription plans with no usage limitations and no additional charges. Kakao built up a user base of about 37 million for its mobile messenger service and in late May launched its Voice Talk mVoIP service, to the fury of SK Telecom and KT.

LG Uplus’s decision initiated the debate of network neutrality, here, because the Korea Communications Commission (KCC) decided to allow mobile operators to charge subscribers to access m-VoIP services from “over the top (OTT)’’ providers, such as Kakao.

LG Uplus has so far invested some 2 trillion won for a broader LTE network and spent aggressively to remain in a stable second position ahead of its rival KT. This resulted in LG seeing a steep fall in profit during the second quarter of this year.

LG Uplus was the first to launch LTE services and at the end of May had 2.4 million LTE subscribers, representing a 37 percent share of the market ― nearly double its share of the overall mobile market.

“LG Uplus was always the smallest local carrier during the past 15 years. This is the right time to completely cut what we call a ‘vicious cycle’,’’ said Lee, adding the company will release a new billing system. <The Korea Times/Kim Yoo-chul>

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