Gov’t gathers opinions on abolishing mobile device act

[Photo by Yonhap]

The South Korean government, which is pushing to abolish the Mobile Device Distribution Improvement Act, began the process of gathering opinions from the country’s three major telecommunications providers and device manufacturers.

According to sources from the telecommunications industry on Wednesday, the Korea Communications Commission is meeting with executives responsible for sales from SK telecom Co., KT Corp., and LG Uplus Corp. to hear their opinions.

Over the next two days, discussions are expected to revolve around the abolition of the obligation for telecommunications companies to disclose their handset subsidies and the cap on additional subsidies for distribution networks, which is 15 percent of the disclosed subsidy.

The Korean government announced plans to abolish the mobile device act, which prohibits mobile carriers from providing excessive discounts or illegal subsidies to customers, during a joint briefing by relevant ministries on livelihood issues which was held at the government complex in Seoul on Monday.

President Yoon Suk Yeol also instructed his top aides to “look for ways to practically lower mobile device prices even before the abolition of the mobile device act by promoting competition between service providers” during a meeting at his Yongsan office on the same day.

The government has been allowing retail outlets to provide additional subsidies of up to 15 percent on top of the disclosed subsidy for mobile devices, but the removal of the cap will enable consumers to purchase mobile phones at lower prices.

There is also a view that the government will prioritize policies that expand the disclosed subsidy or additional assistance, and the ongoing discussions also reportedly include plans to expand manufacturer-carrier sales incentives for Samsung Electronics Co.’s newly released Galaxy S24 series. The industry is now speculating that the disclosed subsidy could be adjusted before sales begin.