[2020 National Audit] 'Useless' Mobile Device Distribution Act and 'Double-Edged Sword' Self-Sufficiency System... On the National Audit Table

7-8th Science and ICT Committee National Audit Begins
6-Year-Old Mobile Subsidy Law Abolition VS Amendment Debate
Ruling Party's Official Stance on 'Jagupje' Expected to Be Mentioned

[Asia Economy Reporter Koo Chae-eun] The much-debated and controversial 'Device Distribution Act' is expected to become a major issue in the 21st National Assembly's audit. Legislative competition over its repeal and amendment has intensified, and the Ministry of Science and ICT, the main government agency in charge, has been discussing revisions to the Device Distribution Act since early this year. Due to the spread of the novel coronavirus disease (COVID-19) and the increase in non-face-to-face demand, discussions related to the 'Device Self-Sufficiency System' are also expected to continue.

According to industry sources on the 7th, discussions on the Device Distribution Act in the 21st National Assembly have largely narrowed down to repeal (proposed by Kim Young-sik of the People Power Party) and amendment (proposed by Jeon Hye-sook, Cho Seung-rae, and Kim Seung-won of the Democratic Party of Korea).

The Device Distribution Act was introduced to reduce household communication expenses and prevent discrimination against users, but it has faced strong criticism for failing to achieve its policy goals during its six years of enforcement. According to Representative Kim Young-sik, an analysis of the purchase costs of major flagship mobile phones after the enforcement of the Device Distribution Act showed that the purchase cost burden for both the Galaxy Note and iPhone increased by more than 50%.

Representative Kim stated, "Even after the sunset of the subsidy cap system under the Device Distribution Act, competition in the mobile phone distribution market has not revived," adding, "Over the past five years, the high performance of flagship smartphones has caused the retail price to surge, but subsidies have rather decreased, resulting in a sharp increase in consumer burden."

Discussions related to the complete self-sufficiency system, which the ruling party is promoting as a 'party policy,' are also expected to continue. The complete self-sufficiency system refers to a system that separates mobile communication services from device sales. However, there is considerable opposition arguing that it is not easy to immediately implement the self-sufficiency system due to employment and livelihood issues at distribution stores.

Han Sang-hyuk, Chairman of the Korea Communications Commission, stated at the personnel hearing in July, "The complete device self-sufficiency system has positive aspects, but there are side effects that require careful consideration," and added, "Considering the tens of thousands of distribution stores, it is not an easy choice, but we are contemplating measures within a feasible range."

Meanwhile, at this audit, Yoo Sang-young, Head of SK Telecom MNO Business, Kang Guk-hyun, Head of KT Customer Division, and Hwang Hyun-sik, President of LG Uplus (as witnesses), are scheduled to attend as representatives of the telecommunications companies.

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