Thinking of upgrading my 3 year old cell phone for 500,000 won…

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They say that they will give 500,000 won if you change the carrier.
“The amount is small and the plan is expensive”

Hyun Son: “There aren't many consumers who choose number portability.”
government. Calls on three mobile operators and manufacturers to request increased conversion support

Photo = Yonhap News

“The subsidy is too small. I just don't want to change my phone.”

Kang Dayun, a housewife in her 30s, planned to change the smartphone she had been using for three years after hearing about a “switching subsidy” that would provide up to 500,000 won if she changed her telecommunications company, but soon gave up. on it. Mr. Kang said: “In order to get the maximum subsidy, I had to stay on an expensive plan for several months. The amount I paid is much more than the plan I am using now.''

The government's transitional subsidy system was introduced with the aim of reducing household communications costs, but consumer response has been muted due to lack of practical impact.

Although the Transition Assistance Fund has been implemented… Consumer reaction is 'shocked'

A cell phone agency in Seodamun-gu, Seoul, quiet as there are no customers/Photo = Reporter Yoo Ji Hee

At around 12:30 on the 21st, Mr. A, an employee of SK Telecom's representative office in Seodamun-gu, Seoul, said: to port their number,” and “There is an additional subsidy and conversion subsidy in addition to the publicly announced subsidy. “Even though you can get it now, many people still think that the 'optional contract' that gives a 25% discount fee is better,” he said.

“We do occasionally get inquiries, but there are actually very few customers who have switched their devices after receiving the switching subsidy.” He added: “When the transformation takes place. The first time the subsidy was mentioned, it was known to be up to 500,000 won, so it was difficult to go through the procedure set by the telco. “There were quite a few customers who said the subsidy was too low,” he said.

In fact, the amount of the conversion subsidy, which emphasized “up to 500,000 won,” was only 30,000 to 130,000 won, depending on the plan and model chosen by the three mobile phone companies. According to the telcos, SK Telecom has set the highest switching subsidy amount at 50,000 to 120,000 won, KT at 50,000 to 130,000 won, and LG U+ at 30,000 to 100,000 won.

To receive the conversion subsidy, you must choose the publicly announced subsidy or the optional contract (25% discount on fees). △SK Telecom's “5GX Platinum (125,000 won)” △KT's “Choice Premium (130,000 won)” △LG U+'s “5G Premier Regular” (equally expensive 95,000 won) to receive the maximum conversion subsidy set by the telco plan. “5G Signature (130,000 Won)” must be maintained for 6 months.

Models eligible for a conversion subsidy include the latest models such as the iPhone 15 Pro, Galaxy Z Flip 5 and Galaxy S24. However, the subsidy is lower than the known maximum amount and there's no practical benefit, such as keeping a high-priced plan, so it's understandable that few people actually opt for it.

Government. “We should increase the transitional subsidy”. Telecommunication company. “The situation has changed.”

Photo = Getty Image Bank

On the 16th, the government revised the enforcement decision of the Law on the Improvement of the Distribution Structure of Mobile Communication Terminal Equipment (Dantong Act) and introduced a conversion subsidy. However, the upper limit of 500,000 won in the field seems burdensome.

As controversy arose over the fact that the transition subsidy payments from the three mobile operators were capped at 30,000 to 130,000 won, the Korea Communications Commission summoned the executives of the three mobile operators and manufacturers Samsung Electronics and Apple on the 18th and asked them to actively cooperate: in increasing transitional subsidies. This is because the subsidy for mobile phones is usually split between the manufacturer and the telecommunications company in a certain ratio (hidden costs).

On the 22nd, Korea Communications Commission Chairman Kim Hong Il will meet with representatives of three telecommunications companies for the first time since taking office to discuss ways to reduce household communication costs. It is planned that the heads of Samsung Electronics and Apple Korea manufacturers will also attend this event. Practical plans to reduce household communication costs are expected to be discussed following the review of the Mobile Communications Act Implementation Act.

However, the telecom industry responded that it is not easy to increase the conversion subsidy. A telecommunications official said. “The transitional subsidy operates flexibly according to the market situation, the competitive situation and the needs of customers, but it is not in a situation where competition for the subsidy (transitional subsidy) is flourishing. There are currently two. Mobile phone manufacturers”. “It was a tight space and the market situation was very different than the Single Tong Act,” he explained.

Yoo Ji-hee, Hankyung.com reporter keephee@hankyung.com

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