Trio of South Korean carriers banned from taking on new customers for most of next month
0. phoneArena 28 Dec 2012, 04:41 posted on
The Korea Communications Commission does not like the idea of subsidized handsets, so when the agency realized that SK Telecom, KT and LG U+ offered subsidies on certain units in excess of 270,000 won ($252 USD), commission members were beside themselves; the result is that the trio has each been fined and will not be able to sign up new customers for portions of next month...
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1. a961009 (Posts: 120; Member since: 04 Aug 2011)
As I am Korean, this is really crazy. The gov. doesn't want people to buy cheap phones...
2. tiara6918 (Posts: 1970; Member since: 26 Apr 2012)
Why?Is that why most of the phones are running 4G LTE?
3. a961009 (Posts: 120; Member since: 04 Aug 2011)
Actually that is because demand of the 4G LTE phones are very high. Of course many people want 4G LTE phones to have high speed of internet connection, but most of the people want just because 4G LTE is more advanced technology than 3G. So people think that 3G phones are old-fashioned phones. That's why in korea manufacturer only release high spec phones.
Do you know why Htc and Motorola decided to close their business in Korea? It is because these manufacturer cannot follow what people want. To be successful in Korea, they must release flagship phone at least every 6month. However for manufacturers, making "only korean market"phones are expensive and since the market is small, they don't think that it is profitable to make it. Moreover in Korea people tends to think that "Galaxy"phones are the best in the world. Although Lg and Pantech releases better phone that samsung phones, people don't buy it. This also goes to Htc Motorola and Sony.
15. tiara6918 (Posts: 1970; Member since: 26 Apr 2012)
Thanks for the info, no wonder samsung still released a galaxy s2hd lte/lte
4. a961009 (Posts: 120; Member since: 04 Aug 2011)
And I forgot to say this....
People in korea thinks that 1gig of ram, Dual/Single core(s), WVGA and QHD displays, and less than 4.7 inch screens phones are low cost or old fashioned phone..... This is real problem.
Anyway sorry 4 my bad English :)
5. fullmonty (Posts: 12; Member since: 28 Nov 2012)
That's what we need here in the US; get rid of subsidies and compete on services.
Better for the consumer; it would bring down the prices.
Plus carriers would be able to say F#@% Y()# to Apple.
Right now Apple demands full pricing from carriers. If subsidies were gone, and it cost $600 to upgrade, only half as many customers would upgrade to the shiny new igadget every year.
9. gazmatic (Posts: 791; Member since: 06 Sep 2012)
With subsidized phones the devil is in the details... Either you pay more in the long run opposed to buying outright or your device is limited, underpowered, locked, carrier branded or loaded with bloatware. Never mind the carrier's refusal to update your phone. If everybody had to pay full price for a phone, certain brands wouldn't survive. I doubt we would even have this two horse os battle.
10. fullmonty (Posts: 12; Member since: 28 Nov 2012)
Buying outright shifts the burden on the manufacturers and not the carriers.
Why do you think all devices are upgraded first in the rest of the world and then months later in the US? Heck, even the arrival of phones is delayed by 4-6 months compared to other countries.
Right now, the three carriers are forced to pay Apple & other manufacturers nearly $400 for every device they sell. They make up the $400 by charging customers ridiculous amounts of money for data plans. According to some estimates 95% of the customers barely use 1GB of data and pay for the 5% of users who consume data like water. The carriers force data plans on all customers whether we like it or not.
Nowhere in the world do companies force you to buy an expensive data plan if you bring your own device. Heck, most countries run on pre-paid SIM cards - only pay for what you use.
Here, in the US its all about excess, pay a flat fee and eat-all-you-want.
If subsidies end, monthly fees would be much lower.
12. gwuhua1984 (Posts: 1237; Member since: 06 Mar 2012)
If those brands could survive outside of US where there's no subsidies, then they could definitely survive in the US without subsidies. Manufacturers are raking in profits from the phones unless they're not selling enough of it, I don't think the cost to making a phone (even if it is a high end phone) will cost $600 while the phone itself is retailing for $800. When iPhone 4 was first released, there were people taking it apart and estimating the cost of making the phone to be around $200 to $300 and the phone is retailing in the Apple store for $600-$800 (I forgot how much exactly), not to mention when the phone was selling for $299 from AT&T, the customer still have to pay for the rest of the phone via their data plans. By removing subsidies, it'll only benefit the consumer more because the manufacturers will battle it out not just on the spec of the device but also the price of the device. It'll be a plus on both carrier and manufacturer pricing for the consumers. Probably won't effect people wanting to get Apple device tho, cause Apple won't go into price wars with other manufacturers but it will benefit those who wants to get an Android device.
11. rusticguy (Posts: 2828; Member since: 11 Aug 2012)
There should be no subsidies on phones. Good it is not there in India and that's why avg billing is 1/10th of what it is in US under contract. Elimination of all sub sidies across the world on phonesw would show then who is the _REAL_ leader in market :)
13. ilani (Posts: 87; Member since: 23 Dec 2011)
Israel has an interesting law! phones are subsidized by carriers. BY LAW, everyone is entitled to a subsidized phone, but are not required to purchase phones from their carriers!
you can import your own phone from anywhere in the world, buy online, whatever!
and the Carrier by law has to credit you the purchase price of the phone.
you can switch carriers, and your new carrier has to take over subsidization.
i think this is better because there are no contracts, locking phones are illegal,
thus companies are forced to compete with plans not phones!
currently, for 99 Shekels (25 Dollars) a month gets you unlimited everything, voice, data, sms, aaaaaand unlimited long distance!!! Yup, unlimited long distance to anywhere in the world! for 59 shekels, the smaller carriers will give you unlimited everything excluding long distance!
16. downphoenix (Posts: 3061; Member since: 19 Jun 2010)
I wish our government would do the same here. The subsidies are nothing more than a loan. A carrier usually makes a minimum of twice the money back they "loan" you for the subsidy, if not more.