Telecoms offering new savings for subscribers

A 55-year-old executive of a large conglomerate surnamed Lee recently purchased a 16 GB iPhone 6 for about 200,000 won ($180). The original cost was 789,800 won.

First, Lee received a 340,000 won discount from his carrier, SK Telecom, on the condition that he will return the phone to the retailer after 18 months.

In addition, Lee received a 215,050 won subsidy for the iPhone 6 by subscribing to a two-year contract on a 60,000-won-per-month unlimited data and calling plan.

“By combining the membership points that the four members of my family receive, we save 14,000 points every month,” he said. “We will use it when we buy a new phone later.”

Lee was able to get the latest iPhone for an affordable price because of the benefits offered by mobile carriers in response to backlash from customers over the Mobile Device Distribution Improvement Act.

The act, which took effect on Oct. 1, requires smartphone subsidies to be kept below the 300,000 won ceiling.

To compensate for the smaller subsidies, carriers have started allowing membership points to be used as cash, and are giving bigger discounts on monthly bills.

However, many consumers aren’t aware of the variety of discounts they are eligible for.

In October, SK Telecom started a program called T Family Points, in which customers on a plan with one to four people can save 3,000 to 25,000 points every month based on the cost of their monthly bill.

SK Telecom customers can use the points to buy new devices, pay for after-sales services and buy apps and accessories.

KT subscribers can also use their Olleh membership points to get a discount of up to 180,000 won on a new phone. KT also now allows membership points to be spent at its offline stores as well as the online Olleh shop.

Promising to return a phone after 18 months is another new way for customers to get a lower price, usually 300,000 won to 380,000 won off, if they spend at least 800,000 won per month in communications costs at their carrier.

After 18 months, if the user wants to keep their phone instead of returning it, they can pay back the discount in 12 monthly installments.

LG U+ is offering its biggest discounts on the iPhone 6 and iPhone 6 Plus, while SK Telecom and KT have applied the same discounts to the Galaxy Note 4 and Galaxy S5 Broadband LTE-A.

Carrier are also offering better package deals on Internet, IPTV and landlines in combination with mobile bills.

Koh, a 49-year-old housewife who has two daughters, said that she now spends 7,000 won on her landline and Internet services after choosing to pay for them through her mobile carrier. The same wire services used to cost her family 39,000 won each month.

Telecoms are using the wired service packages in an attempt to prevent their customers from switching to a new carrier because wired service contracts usually last longer than two years.

Subscribers to LG U+ also have the option of combining their subscription with their friends.

LG U+’s U+ Family and Friends Discount provides discounts to customers who recommended friends or family members to subscribe to LG U+.

The Ministry of Science, ICT and Future Planning also recently amended the mobile device act to expand the 12 percent discount given on all two-year contracts to include one-year contracts, regardless of where the phone was purchased.

BY SOHN HAE-YONG AND KIM JUNG-YOON [kjy@joongang.co.kr]