Thrift firms fill void by selling pricey phones

Companies specializing in altteul or thrift phones have started selling Samsung Electronics’ new flagship smartphone, the Galaxy S5, one of the most expensive phones on the market, to take advantage of the business suspensions of SK Telecom and KT.

The No. 1 and No. 2 mobile carriers are in government-enforced business suspensions for offering excessive subsidies on smartphones. SK is prohibited from accepting new contracts or selling phones until May 19, and KT is suspended until April 26.

Annex Telecom and SK Telink, thrift phone operators, said they started sales of the Galaxy S5 online yesterday. The No. 1 thrift phone operator CJ Hello Vision hasn’t yet sold the phone, but it’s in discussions with Samsung Electronics and is expected to introduce the device within a day or two on its website.

SK Telecom was the first mobile carrier to launch Galaxy S5 on March 27. Its suspension began on April 5.

Annex Telecom started selling the Galaxy S5 on a 36-month installment plan on its website from 4 p.m. yesterday and offered nine monthly plans.

Annex Telecom sells its phones and services at post offices, convenience stores and on its website. The Galaxy S5 is only offered on its website.

“We launched the Galaxy S5 in order to let consumers know that thrift phones also include the latest smartphones,” said a spokesman for Annex Telecom.

“Before the Galaxy S5, we offered the Galaxy Note 3 and Galaxy S4, but many people seem to think that thrift phone companies only offer outdated smartphones,” he said.

SK Telink and E-Mart also started retailing the Galaxy S5.

The Galaxy S5 may be a boon for the thrift phone companies. The number of thrift phone subscribers actually reached 2.87 million as of the end of last month and is growing thanks to the business suspension on the big mobile carriers.

Some are questioning the very idea of thrift phone companies selling the pricey Galaxy S5 and say the price of their monthly plans are almost the same as those offered by existing mobile carriers.

Although the government is trying to lower the price the thrift operators have to pay to use LTE network of the three mobile carriers, discussions with the big carriers are still ongoing.

BY KIM JUNG-YOON [kjy@joongang.co.kr]