Ahead of the Abolition of the Mobile Phone Subsidy Law... Store Merchants Say, "Should We Compete Now?" Indifferently

Minister Yoo Sang-im Meets Merchants at Techno Mart
Mobile Carriers: "Manufacturers Should Also Contribute"
"Attention Needed for AI as Well"

Science and ICT Minister Yoo Sang-im is listening to the opinions of merchants during his visit to Technomart in Gwangjin-gu, Seoul, on the 21st, ahead of the abolition of the Mobile Device Distribution Improvement Act. Photo by Yonhap News

"For a long time, the mobile carriers haven't been spending money, so are they going to start competing now?" (Techno Mart cellphone store merchant Mr. A)

On the 21st, Yoo Sang-im, Minister of Science and ICT, visited the field to observe the mobile telecommunications market about six months before the official abolition of the Device Distribution Act. The announced repeal law will take effect from July 22.

Merchants selling cellphones at Techno Mart in Gwangjin-gu, Seoul, expressed both expectations and concerns about the repeal of the Device Distribution Act. Mr. A, who runs a cellphone store, gave a somewhat skeptical response to Minister Yoo's question, "Do you think the repeal of the Device Distribution Act will help revitalize the telecommunications market?"

Mr. A began, "Last September, a 'switching subsidy' was introduced, and I had high hopes, but it was only supported with about 50,000 to 90,000 KRW for a few special device models, so there was no real benefit." He continued, "I don't know exactly if the carriers are colluding or not, but the policy benefits did not reach consumers," adding, "Since the carriers are not moving at all, I don't have high expectations for the repeal of the Device Distribution Act."

He also said, "The carriers haven't spent money for a long time, so I wonder if they will compete now," and added, "Whether it's the plans or the switching subsidies, they have been operated almost like collusion. Even if the Device Distribution Act is repealed, we need to see if there will be any benefits for sellers or consumers."

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Another merchant, Mr. B, said, "There are cases where consumers are forced to pay expensive basic plans," and emphasized, "Young people understand the system and don't resist, but older people are often surprised. If the Device Distribution Act is abolished, measures to address such issues need to be created."

In response, Minister Yoo stated, "The government will promptly revise subordinate laws to ensure the timely implementation of the repeal of the Device Distribution Act, minimize market confusion and user damage caused by institutional changes, and resolve difficulties faced by the distribution industry."

On that day, Minister Yoo held a brief meeting for about 10 minutes with representatives from the three major carriers and distribution stores to listen to their opinions. The carriers emphasized their roles in the era of the artificial intelligence (AI) revolution and expressed that manufacturers such as Samsung Electronics should also contribute to reducing communication costs.

Lee Cheol-hoon, Head of Communications Center at LG Uplus, introduced himself by saying, "Before joining LG Uplus, I was in charge of mobile at LG Electronics," and said, "The contributions made by manufacturers in the market before the Device Distribution Act have been greatly reduced since then."

He added, "If we expect a competitive environment, manufacturers should also contribute." Upon hearing this, Minister Yoo looked around and asked, "There is no one from Samsung Electronics or Apple here, right?" Minister Yoo also said, "Some cellphone device prices exceed 2 million KRW," and added, "Since devices are usually replaced every 2 to 3 years, there is a limit to reducing communication fees because of that." This implies that smartphone manufacturers also need to lower device prices or expand subsidies.

Lee Ki-yoon, Head of CR Division at SK Telecom, said, "The market is changing rapidly, so companies are deeply concerned about what they will live on 10 or 20 years from now," and stated, "Steady profits, innovation, and creating new jobs are important missions."

He said, "If a balance can be found between promoting competition and prohibiting user discrimination in the telecommunications market, both companies and consumers can coexist," and requested the government to "pay attention to the role of carriers in AI and AI infrastructure development."

Minister Yoo said, "We plan to revitalize the used phone and budget phone markets and lower communication fees through full MVNOs while improving service quality," and added, "Large companies should not only look at the domestic market in the AI era but also aim to enter the global market by incorporating AI."

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