It is expected that the penalty for late-stage cancellation of ultra-high-speed Internet contracts will be reduced by an average of 40%, which will reduce the burden on consumers when canceling their contracts.

The Ministry of Science and ICT (Minister Lee Jong-ho) announced on the 26th that it will lower the penalty for late-term termination of ultra-high-speed Internet service contracts (discount refund) in consultation with the four major telecommunications companies (KT, SKB, SKT (resale), LGU+).

These improvements are a follow-up measure to the ‘Measures to Promote Competition in the Telecommunications Market’ announced on July 6.

The ultra-high-speed Internet market is centered around 3-year contracts, but the previous penalty fee increased until 2/3 (24 months or more) of the contract period had passed, and then decreased. This resulted in a significant penalty fee being incurred right up until the contract expiration date (36 months), which was a burden to users when canceling the contract during the contract period.

In order to improve these problems, the Ministry of Science and ICT has been discussing a penalty improvement plan with the four major telecommunications companies, and after discussions with the Telecommunications Service System Improvement Advisory Committee, which includes consumer groups, experts, and businesses, it has decided to improve the ultra-high-speed Internet penalty structure by increasing the contribution to the user's subscription maintenance period.

According to the improvement plan, the penalty will be reduced from halfway through the contract period (18 months) and will drop to 0 won at the expiration date (36 months). The structure will be changed, the maximum penalty amount will be reduced (8% to 14%), and the penalty amount in the latter half of the contract (after 18 months) will be reduced by an average of about 40%.

The four telecommunication companies reported terms of use reflecting the improvements on July 26, and they are scheduled to be implemented in the second half of 2023 after each company's computer development.

Professor Shin Min-soo (Hanyang University), chairman of the Advisory Committee for the Improvement of the Telecommunications Service System, said, “Ultra-high-speed Internet is a major telecommunications service used by the majority of the population, along with mobile phones, and it also holds an important position in the use of bundled services.” He added, “This improvement is expected to contribute to revitalizing competition in the telecommunications market as users will more actively switch service providers as the burden of canceling ultra-high-speed Internet services is lowered.”