South Korea’s phone market faces a major shift as the government ends its decade-old handset subsidy law. This change allows carriers and retailers to offer bigger discounts and flexible pricing. Consumers may soon see cheaper smartphones, including Samsung’s Galaxy Z Flip7 and Fold7 and Apple’s iPhone 17.
Industry experts expect a “subsidy war” as carriers compete aggressively for market share. SK Telecom plans to launch bold pricing strategies after losing over 800,000 subscribers during a recent data breach. This competition could lead to zero-cost smartphones under specific plans and promotions.
The now-repealed Mobile Device Distribution Improvement Act, introduced in 2014, aimed to create fairer pricing. It limited store discounts to 15 percent and forced carriers to publish fixed subsidies. However, critics argued it inflated prices and restricted consumer benefits. Years of industry and public complaints pushed the government to repeal the law and promote a more competitive market.
The phone market will now operate without subsidy caps. Carriers no longer need to publish fixed subsidies, and retailers can offer larger discounts. Customers also gain the freedom to combine the 25 percent contract-free discount with additional store promotions, which was previously restricted.
Retailers must clearly disclose subsidy terms to avoid penalties. Customers are advised to compare offers from authorized dealers and independent shops for the best deals. Discounts may differ based on whether customers switch carriers, upgrade, or start new plans.
Samsung and Apple will submit monthly reports on incentives provided to carriers and retailers. This measure increases transparency and helps regulators monitor the market closely.
The telecom regulator plans to enforce strict consumer protections. It prohibits discrimination, aggressive upselling of expensive plans, and misleading advertisements. Vulnerable groups, such as seniors and teenagers, will receive additional support to avoid exploitation during this transition.
A task force of regulators and telecom companies will meet twice weekly to monitor the market. They aim to prevent unfair practices and maintain stability as carriers roll out aggressive promotions.
Nevertheless, the timing coincides with major product launches. Samsung’s foldable smartphones debut soon, and Apple’s iPhone 17 will follow later this year. These events could trigger heavy competition among carriers, delivering unprecedented discounts to South Korean consumers.
