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Mobile carriers plan to raise subsidies [FARS News Agency]
[October 24, 2014]

Mobile carriers plan to raise subsidies [FARS News Agency]


(FARS News Agency Via Acquire Media NewsEdge) SK Telecom, KT and LG Uplus plan to raise their handset subsidies within the permitted cap, officials from the mobile carriers said Wednesday.

SK Telecom plans to provide consumers the maximum amount allowed by the new telecom law, which went into effect this month.

It plans to provide 345,000 won to a customer buying Samsung Electronics' Galaxy Note 4, but only if the customer agrees to subscribe to the carrier's new high-speed and Internet-based TV services.

Currently, SK Telecom offers some 100,000 won to a customer on the Note 4. We will pay more to attract new customers and to revitalize the market, which has been struggling since the act went into effect, the official said.

The nation's top mobile carrier plans to release other pricing plans that provide greater subsidies.

KT and LG Uplus said they are mulling over matching market leader SK Telecom's move.

The Mobile Device Distribution Improvement Act has been under fire since its introduction as it stopped customers from buying new handsets due to a steep fall in subsidies.

The act was originally intended to benefit consumers by encouraging the carriers to focus more on customer-oriented services.

However, a significant reduction in demand for new devices has instead ensued.

Consequently, manufacturers have insisted that the regulation has limited consumer choice, while dealerships have complained that it is wreaking havoc on their businesses.

Lawmakers of both the main opposition and the ruling parties joined forces to criticize the law at this year's annual National Assembly audit of government agencies.



Lawmakers have reached a consensus to scrap the ceiling for subsidies. Discussions over the revision of the act will likely accelerate next month, an official at LG Electronics said.

Rep. Bae Kwang-deok from the ruling Saenuri Party joined Rep. An Min-seok from the main opposition New Politics Alliance for Democracy to demand the ceiling on subsidies be abolished.


The lawmakers also said they will push handset manufacturers and carriers to publicize the amount of subsidies they will offer. Subsidies have two parts — one provided by manufacturers to carriers and another by carriers to consumers.

Samsung Electronics and LG Electronics oppose publicizing their subsidies to carriers, citing confidentiality issues.

Our marketing activities are dependent upon the market situation. The amount of subsidies to be offered to carriers is subject to change, and this is a sensitive issue, said an LG official.

Amid a growing public backlash, the Ministry of Science, ICT and Future Planning (MSIP) has indicated that it will revise the regulations.

The MSIP, along with the Korea Communications Commission - the nation's top telecom regulator, has decided to update the controversial new subsidy act, an MSIP official said.

(c) 2014 Fars News Agency. All rights reserved Provided by SyndiGate Media Inc. (Syndigate.info).

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