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Carriers abide by law in latest phone price cuts

Mobile carriers have started lowering smartphone prices as they try to increase sales and boost the communications market through legal means instead of offering excessive subsidies.

The discounts offered by carriers differ by smartphone and monthly plans. The subsidy ceiling set by the government is 300,000 won ($272).

SK Telecom lowered the price of Samsung Electronics’ Galaxy Alpha to 520,000 won from 740,000 won and LG Electronics’ AKA to 390,000 won from 520,000 won.

When consumers receive the maximum 270,000 won subsidy by subscribing to SKT’s 76,000 won monthly plan, they can get their hands on the Galaxy Alpha phone for 258,000 won.

The carrier has also cut the price of LG Electronics’ AKA by 24 percent since Dec. 10. The phone now costs 399,300 won instead of 528,000 won. It lowered the price of the Vega Secret Note 58 percent to 297,000 won from 699,600 won on Dec. 4, too.

LG U+, the third-largest mobile carrier, has also cut the Galaxy Alpha to 495,000 won, a 34 percent discount. When consumers receive the maximum 250,000 won subsidy for subscribing to the 89,900 won monthly plan at LG U+, they can purchase the smartphone for 245,000 won.

Since Dec. 10, LG U+ has been selling the LG Optimus GX2 for 24 percent cheaper at 451,000 won. Earlier, on Dec. 4, it also cut the price of the GX 33 percent to 352,000 won.

The Galaxy Zoom 2, meanwhile, has been retailing at 297,000 won from LG U+ since Dec. 9, 57 percent lower than the recommended retail price.

KT has not announced a plan to lower smartphone prices. It said it is in discussions over costs with smartphone manufacturers but that nothing has been determined so far.

However, some critics see the price cuts as merely a way for carriers to unload unpopular smartphones by the end of year.

“We are pressured to shift stocks, but currently, due to many regulations, there is no other way to attract customers other than by lowering prices,” said a retailer of one of the three mobile carriers.

“Since the implementation of the Mobile Device Distribution Improvement Act, the manufacturers and mobile carries both feel a responsibility to lower the burden of household communication fees,” said a spokesman for LG U+. “According to the stock volumes and conditions of each carrier, smartphone prices could continue to be lowered.”

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