Cost-Effective Best Value Prepaid Phones Are Rising

Warm Breeze for iPhone Specials
Telecom 3 Giants Reduce Membership Benefits
Bundled Discounts Meaningless Due to 'Code Cutting'
Ultimately Choosing 'Cost-Effectiveness'
Switching to Budget Phone Plans

[Asia Economy Reporter Koo Chae-eun] As the budget phone plans highlight cost-effectiveness and valuable benefits amid the 'iPhone 12 boom,' the number of subscribers is rapidly increasing. With the significant reduction in membership benefits from existing carriers and the code-cutting phenomenon (cancellation of cable TV and IPTV) rendering bundled discount benefits meaningless, customers who prioritize 'cost-effectiveness' are flocking to budget phone plans.

According to the industry on the 15th, KT M Mobile saw a 38% increase in new subscribers to three high-capacity unlimited data plans during the week from October 30, when the iPhone 12 was released, to November 5, compared to the October average. LG HelloVision also experienced a 31% increase in the average daily number of subscribers to high-priced LTE plans during the same period compared to the October average.

The total number of budget phone subscribers has also increased. According to the Korea Telecommunications Operators Association (KTOA), the net increase in subscribers switching from the three major carriers to budget phones in October was 13,039, marking a five-month consecutive increase (June 5,138, July 6,967, August 9,909, September 12,433, October 13,039).

In the case of the iPhone, the traditionally higher proportion of unlocked devices positively influences the expansion of budget phones. The unlocked device system refers to purchasing a device directly from manufacturers, electronics retailers, large discount marts, or online shopping malls without going through a carrier, and then connecting it to a carrier or budget phone service.

An industry official said, "With the recent expansion of the unlocked device market, interest in budget phones is increasing, especially among younger generations. Since the younger generation heavily consumes OTT content, it is difficult for them to benefit from bundled services like IPTV from existing carriers. They are moving to budget phones while looking for cheaper plans than the three major carriers, whose membership benefits have also decreased."

Accordingly, budget phone companies are actively trying to increase consumers by offering separate promotions or launching exclusive insurance products. U+ Altteul Mobile was the first in the budget phone industry to introduce an iPhone-exclusive insurance product.

The strengthened competitiveness of 5G plans, which was a weakness of budget phones, is also contributing to their popularity. This is because the Ministry of Science and ICT announced on the 3rd a plan to reduce the wholesale fees that budget phone operators pay to the three major carriers. Additionally, with LG Uplus acquiring LG HelloVision (formerly CJ Hello) at the end of last year and KT Skylife entering the budget phone market, price and service competition is expected to intensify.

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