Choosing Internet Pricing Schemes: Flat or Usage in Korea
15 Pages Posted: 10 May 2011 Last revised: 19 Aug 2014
Date Written: March 31, 2011
In this paper, we study the pricing behavior of Internet service providers in Korea over the last decade. The changes in user type, marginal utility and market structure are considered as explanations for the inability to choose between flat or usage-based pricing. We find the higher the difference in user type or the higher the marginal utility of traffic, the more attractive usage pricing is for service providers. We also anticipate that flat pricing only will cease with the introduction of MVNO and mVoIP service in Korea.
Keywords: Pricing of the Internet Services, Flat Pricing, Usage-based Pricing
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