Mobile carriers vie for sales after suspension

Since Tuesday, the first day that the nation’s top three mobile carriers resumed sales after serving a government-sanctioned 45-day business suspension, the mobile communications market has already showed signs of becoming overheated.

The carriers battled on Tuesday to offer lower smartphone prices, new monthly plans and recently launched mobile devices.

According to the Korea Telecommunications Operators Association (KTOA) yesterday, 57,154 people changed their mobile carrier on Tuesday. The Korea Communications Commission set a limit that if more than 24,000 people switch carriers per day, it indicates the market is overheated.

The nation’s No. 1 mobile company SK Telecom attracted 29,489 customers from other carriers, which is a record for one day. The number is more than quadruple the daily average of 6,236 new subscribers that SK Telecom’s signed up when it was the only mobile phone company in operation while KT and LG U+ were serving their suspensions.

LG U+ posted 14,883 new customers and KT attracted 12,782.

SK Telecom, which risks seeing its market share fall below 50 percent after losing 140,000 subscribers during its business suspension, is upping its marketing promotions.

Officials cited demand built up during the operation-suspension period as the main reason for the high number of new subscribers.

“There has been pent up demand as mobile carriers have been suspended from operating for 45 days in a row. Also, the price cuts on mobile devices that started yesterday also brought a higher number of mobile portability,” said a spokesman for SK Telecom.

“KT also saw its subscribers suddenly shoot up when it resumed sales on its own after it ended its 45 days of business suspension,” said another industry observer. “As the three mobile carriers all have resumed sales, SK Telecom, which had the longest straight business suspension of 45 days from April 5 until May 19, is expected to see its number of subscribers soar.”

On Tuesday, the three mobile carriers dropped the price of LG Electronics’ G2 and Optimus G Pro and Pantech’s Vega Iron by 150,000 won to 250,000 won ($146 to $243), which also encouraged people to change carriers and buy new phones.

According to the mobile communications industry, SK Telecom was selling its Galaxy S5 for 190,000 won on Tuesday, in addition to LG’s Optimus G Pro for 199,900 won and Pantech’s Vega Iron 2 for 73,200 won.

Some raised suspicions that SK Telecom had offered illegal subsidies on its smartphones after announcing it would secure its 50 percent market share and is set to recover losses incurred during its suspension. SK Telecom denied the claim.

“We have strengthened our sales and retail network as well as cut the price of mobile devices the most among the three mobile carriers,” said a spokesman for SK Telecom.

“It would not be easy for mobile carriers to attract customers by pouring out subsidies as they did before. The government’s will to crack down on the illegal subsidies is too strong and mobile carriers are planning to compete by lowering the prices of mobile phones and including monthly plans instead of subsidies,” said one source.

Meanwhile, KT, the nation’s No. 2 mobile network operator, said yesterday its subscribers exceeded nine million in the four months since it began offering LTE.

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