Korea replaces phones most often in OECD

Korea topped the list of 33 Organization for Economic Cooperation and Development (OECD) member countries with the highest number of new smartphone purchases and the shortest period of time to replace them.

Of Korean smartphone users, 77 percent of Korean users replaced their devices last year, data compiled by market researcher Strategy Analytics showed, with consumers saying they purchased a new phone every 15.6 months on average.

Moon Byung-ho, a lawmaker from the New Politics Alliances for Democracy (NPAD), yesterday submitted the data collected last year as part of the annual parliamentary audit on the Ministry of Science, ICT and Future Planning at the National Assembly.

Considering that most Koreans subscribe to a two-year contract through their mobile carrier, this means many are breaking their contract about nine months before they finish paying their monthly installments on the device.

On the ranking, Korea was followed by Chile, where 69.4 percent of the population purchased new phones last year and used their phones for an average of 17.3 months. The United States came in third with 65.8 percent of smartphone users replacing their devices and then using them for about 17.3 months.

The United States was followed by the United Kingdom, Denmark, Ireland, the Netherlands, Portugal, Sweden and France.

Japan was 22nd, with 41.1 percent of the country’s smartphone users buying a new one and taking an average of 29.2 months to replace them.

Moon said this shows that changing devices frequently has added to Korea’s high monthly household spending on mobile carriers, which was about $148.39 as of 2011 according to OECD data. This was the third-highest amount spent on phones among OECD countries, based on a comparison by the organization last year. Korea was followed by Japan and the United States. The monthly spending increased to 159,400 won ($149.26) per month as of the first quarter of this year.

In 2011, Korea started allowing consumers to bring in old phones or new phones purchased from somewhere else to a mobile carrier and then sign up for a contract.

Moon noted that people who brought in their own phone to a mobile carrier rather than buying one from the telecom only accounted for 1 percent of the total mobile phone market. He said that he hoped the ministry would work toward proposing a bill that would prevent mobile carriers from selling phones.

The lawmaker said this policy would discourage Korean consumers from replacing their phones too often.

Moon said he and two other NPAD lawmakers, Choi Won-sik and Choi Min-hee, are also preparing a bill to require mobile phone manufacturers to disclose their prices to consumers, a clause that was dropped from the Mobile Device Distribution Improvement Act. The bill is scheduled to be submitted in the next few weeks.

Much of the audit by the lawmakers was focused on criticism of the act, with the committee members saying that the law has increased households’ communication costs.

Lawmakers of the ruling and the opposition parties condemned the law, saying it had made mobile phones even more expensive.

Rep. Kwon Eun-hee of the ruling Saenuri Party said that the subsidy for a Galaxy S5 had dropped 60 percent since the implementation of the law, from 200,000 won to 86,000 won.

“Although there can be trials and errors at the initial stage of the implementation, the ministries should have thoroughly studied how the subsidies and market conditions might change,” said Kwon.

The subsidies for a Galaxy Grand 2 plunged 40 percent, Vega Iron dropped 47.4 percent and Galaxy S5 Broadband LTE-A slid 57.2 percent after the law took effect, according to the report by Kwon.

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