Starting Saturday, KT will offer pre-sales of three iPhone models under monthly plans ranging from 45,000 to 95,000 won (around $40 - $80).

 

Samsung has already responded by slashing the price of its most expensive smartphone, the Omnia2, the Wall Street Journal reported. The phone now costs the equivalent of around $300 - down from $900 - on a contract from carrier partner SK Telecom. The Omnia2 may now also be obtained for free on an $80 monthly plan.

 

The drastic price cut is significant because Samsung and LG both typically charge much higher prices for handsets in their home market than they do internationally.

 

But local analysts have doubted that Apple will fare much better than vendors like Motorola and Sony Ericsson while trying to break into the Korean market, which despite the pricing disparity is dominated by the local players.

 

Meanwhile, UK supermarket retailer Tesco has announced it will begin selling the iPhone before Christmas on its own contract and pre-paid phone plans.

 

Tesco Mobile confirmed that it would introduce the iPhone 3G and the latest 3GS model in the UK before Christmas as part of its existing MVNO on operator O2's network.

 

The iPhone distribution deal is the third that Apple has struck in Britain since O2 lost its exclusive rights to carry the handset last month. Orange has already launched the handsets, and Vodafone is planning a launch next year, after both operators reached their own deals with Apple.

 

Although a launch date has not been confirmed, Tesco Mobile's iPhones will be offered on contract and pay-as-you-go deals.

 

Tesco is aggressively ramping up its efforts to take on the mobile market with plans to double the number of Tesco Mobile outlets to 200 by the end of 2010 building up to a network of 500.

 

Last week Tesco told analysts that it wants to more than double the profit it generates from non-grocery businesses like its bank and telecoms services. It also announced that it would be partnering with Cable & Wireless in a five-year deal to provide broadband and home phone services alongside Tesco's mobile telecoms offers.

 

The retailer said it sees potential to generate €2.2 billion ($3.3 billion) of revenue and €220 million of profit from telecoms in the medium term.