Budget Phones Stuck at 7 Million Users... 5G Impact Still Minimal Despite 30,000 KRW Plans

[Asia Economy Reporter Seulgina Jo] Ahead of the 1st anniversary of 5G commercialization, a 5G plan priced as low as 30,000 KRW has been launched in the budget phone market, but it is being evaluated as just a minor breeze. In the three months since December last year, the number of 5G budget phone subscribers remained in the 300s, and the total number of budget phone subscribers has yet to recover the 8 million mark that was lost six months ago. The government plans to soon announce measures to revitalize budget phones centered on 5G, but it is uncertain whether the situation will turn around.

According to the 'Wireless Communication Service Subscription Line Statistics' released by the Ministry of Science and ICT earlier this month, as of the end of February, the cumulative number of budget phone subscribers was 7,611,640, a decrease of 61,134 compared to the previous month. Compared to February last year, it decreased by 397,526.

Just a year ago, the number of budget phone subscribers was around 8 million, but it dropped to the 7 million range starting from September last year. This is because the decline in subscribers centered on 2G and 3G continued, and the anticipated effect of 5G, which the market was paying attention to, did not meet expectations. At the beginning of February, LG Uplus and KT launched 5G budget phone plans priced in the 30,000 KRW range, but the number of subscribers in one month (as of the end of February) increased by only 91 to 318. It is analyzed that the high cost of devices, exceeding 1 million KRW, acted as an obstacle.

The industry expects that with the release of mid- to low-priced 5G devices starting this first half of the year, the 5G effect will become full-fledged in the budget phone market as well. An industry official said, "For budget phone customers who want to reduce communication costs, the burden of device prices is still significant," adding, "As the market is flooded with used and affordable devices after one year of commercialization, attracting 5G subscribers will become easier and will invigorate the market."

Currently, SK Telecom has also joined the move to launch plans priced as low as 30,000 KRW by providing 5G networks to budget phones starting this month. The Ministry of Science and ICT is also preparing measures to revitalize budget phones from the perspective of expanding consumer choice. In addition to the reduction of radio usage fees included in this year's work report, discussions are underway on device supply measures and budget phone-based bundled products.

This content was produced with the assistance of AI translation services.