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South Korea: In saturated market, wireless cos walk a fine line to compete

 |  April 11, 2014

South Korea stands as one of the most saturated smartphone markets in the world. With such high use, reports say telco companies are forced to get creative to ensure their share of the market.

A price was is raging between the nation’s top operators, SK Telecom, KT and LG U+, but it’s a tricky situation that has forced contracted handset makers to pay the losses to operators from lower costs for consumers. The problem is compounded, say reports, as South Korean wireless firms look to adopt a subsidizing model followed in other national markets that offer low handset costs for a long-term contract.

As a repercussion, the Korea Communication Commission has fined operators hundreds of thousands of dollars, and has more recently ordered business suspensions on the firms, over concerns that subsidizing phone costs has lead to consumer poaching.

Lower handset costs do not necessarily benefit the consumer, the regulator said, and instead operators should lower their wireless plans. The KCC is reportedly looking to implement new regulations that would promote such long-term benefits to wireless consumers.

Full Content: Venture Beat

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