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Korea's phone plan subsidy cap expires in July — as does its ban on 'discriminatory' pricing

Published: 23 Apr. 2025, 19:59

A banner is displayed at a mobile phone store in Seoul on Nov. 25, 2024. [YONHAP]

Korea will abolish the Mobile Device Distribution Improvement Act in July, ending a key regulation that has governed the mobile phone market since 2014.

The law, introduced to prevent excessive and opaque subsidies in mobile phone sales, placed a legal cap on the amount of support telecom companies and retailers could offer customers. It also required public disclosure of subsidies and banned discriminatory pricing based on customer type.

The Korea Communications Commission and the Ministry of Science and ICT announced Wednesday that they will issue a revised decree under the Telecommunications Business Act, which will take effect on July 22, when Mobile Device Distribution Improvement Act is formally repealed.

With the subsidy cap lifted, telecom retailers will be allowed to set their own subsidy levels, as long as the source, amount and any bundled service conditions are clearly disclosed in contracts.

But discrimination based on personal characteristics such as age, residence or physical condition remains prohibited when customers are purchasing the same device under the same plan and contract type.

Authorities clarified that temporary promotional offers for marginalized groups, such as older adults and people with disabilities, will be allowed.

Offering extra subsidies to people older than 65 around Parents’ Day or to disabled people during Disability Day, for example, will not violate the law.

New rules also prohibit telecom companies from signing service contracts with management entities of apartment complexes or other multiunit buildings that restrict residents’ choice of service provider.

Violations of this rule may result in fines of up to 1 percent of the company’s revenue.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY JEONG JAE-HONG [[email protected]]