South Korea is the first country to launch the 5G network on a commercial scale. The country already has the Samsung Galaxy S10 5G as well as the LG V50 ThinQ 5G mobile phone. However, 5G smartphones do not come cheap, at least not for now. In order to attract consumers to use 5G networks, South Korea’s three major operators SK Telecom, KT and LG U have launched high subsidies for 5G phones and the subsidy amount can even account for more than half the original price of the phone.
However, the Korean Communications Commission (KCC), said that it will take action against mobile operators which provides illegal subsidies to 5G users and fines will be appropriated. The Korea Times reported that KCC recently convened an executive meeting of the three major operators. KCC officials warned these operators not to provide the Galaxy S10 5G and LG V50 ThinQ 5G at unreasonably low prices otherwise they may be violating the law.
KCC officials said “we are closely watching the 5G smartphone market and we will take the necessary measures if necessary.”
Selling things at low prices will also break the law? This seemingly contradictory law is actually a regulation for illegal subsidy and malicious low-price competition by operators in South Korea. However, it is a problem for 5G mobile phones because 5G phones are costly. Without high subsidies, operators cannot attract consumers to choose 5G mobile phones and 5G networks, so the three major operators in South Korea have made high subsidies for 5G mobile phones and 5G users.
Take LG’s V50 ThinQ 5G mobile phone as an example. It was released in the Korean market for 1.2 million won, which is about $1,000. This price is much more expensive than ordinary mobile phones, but some of the operators’ stores will offer discounts of up to 600,000 (∼$500). This practice will violate the Korean legal restrictions on telephone subsidies, so there is a warning from KCC officials.