The Korean government has declared that it would crack down on illegal subsidies on mobile phones so that the mobile phone sellers cannot offer bargain prices on cellphones anymore. (image: Kobizmedia)
SEOUL, Korea, Mar 31, 2014 (Korea Bizwire) — It has been two weeks since three major mobile telecommunications companies were ordered to suspend their business for offering illegal subsidies to consumers.
The mobile phone retail market has been frozen solid ever since in Korea. From the beginning of the suspension on March 13 to March 25, the number of customers for handset replacement at mobile phone retail outlets was on average 5,301 a day. When compared to the average before the suspension, which were over 38,000 in numbers per day, the sales have dropped to one seventh.
The mobile service providers are taking turns to be suspended; and for now until April 4, it is SK Telecom’s turn to be open for business. However, the situation doesn’t seem so bright for SK Telecom either that the company has only succeeded in taking in an average of 5,407 new users per day while its competitors are serving their time.
While the series of suspensions happening two companies at a time, only one company can invite new customers, making it rather easy for the government authorities to watch over it. There are not many aggressive marketing schemes the mobile dealers can work on while being watched so closely.
Related News:
Murphy’s Law plagues mobile carriers (The Korea Herald, Mar 26)
Thrifty phone carriers thrive with suspension (The Korea Joongang Daily, Mar 25)
The Korean government has declared that it would crack down on illegal subsidies on mobile phones so that the mobile phone sellers cannot offer bargain prices on cellphones anymore.
Consumers have become more reluctant to buy new mobile phones as the amount of money they must pay have increased substantially. A mobile phone dealer located near Seoul Train Station said, “People who have come to change the service provider to SK Telecom are discouraged by the lowered subsidies.”
The budget mobile phone sales which were predicted to increase during the suspension have fallen short of expectations as well. It has turned out that only about a thousand more people have joined the service each day.
The budget phone companies explained that such a slight increase does not seem to be resulted by the suspension of mobile phone service providers but is just usual reflux back to the sales level of December 2013. A budget phone maker said, “We haven’t been benefited much from the recent suspension.”
Written by Robin Koo (linguistkoo@koreabizwire.com)
Technology (Follow us @Technews_Korea)
