lecommunication industry.J. Browett agrees with Arnold and Guy stating that changes in telecommunications in Korea can be said to have been initiated and implemented by the government. An illustration given was that a policy was adopted by the government to upgrade the priority of investment in telecommunications during the 5th Five-Year Economic Development Plan in 1982 to 1986. As a result, telecommunciations investment was increased from 3% of total national fixed assets in the 1970s to 7% in the 1980s. The Telecommunications Basic Law was largely revised to encourage all parties concerned to invest in research and development into more sophisticated technologies and more relevant socioeconomic policies in the highly competitive telecommunications environment. KT has reinvested more than 50% of its total profits in the development of telecommunications facilities. After being privatized, common carriers and operators in several countries have tended to increase rather than decrease their tariffs to provide high-quality services, which require financing of high-tech facilities. However, it is also worth noting that Korea lowered its telephone tax from 15% to 10% in accordance with the revised Telephone Tax Law in January 1988. The current tariffs for a local call have been fixed at 30 won (about US $0.37) for both a subscriber's telephone and a public payphone per three minutes - relatively cheaper than the rates prevailing in developed countries. Owing to the introduction of competition in international calls between KT and DACOM, furthermore, the tariff for international calls was reduced up to 3% by DACOM and 7% by KT. This information shows that privatization can be the answer to effective and affordable telecommunication services.He further goes on to state that economic factors, which are intertwined with government policy, have also influenced the introduction of a decentralized or liberalized industry in Korea. The ...
