Korea to mandate subsidies without handset sale

Dylan Bushell-Embling
11 Jul 2014
00:00

After years of tussling with South Korean operators over the issue of handset subsidies, the nation's regulators are introducing changes to the mandated caps. But the new rules may only add to the friction.

The Korea Communications Commission has announced it will move away from a mandated 270,000 won ($265) cap on handset subsidies, the Korea JoongAng Dailyreported.

The regulator will instead start adjusting the subsidy ceiling every six months based on market factors including competition. The cap will range from 250,000 won to 350,000 won.

The Ministry of Science, ICT and Future Planning subsequently announced legislative changes due to take effect in October that will adjust the subsidy rules.

While operators typically only offer large subsidies in the form of handset discounts to subscribers of expensive monthly plans, the new laws will require them to offer subsidies for low-cost plans as well. The size of the subsidy will be dependent on the cost of the monthly contract.

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