On the First Day of the Repeal of the Mobile Device Distribution Act, There Was No Chaos

"I thought the price of mobile phones would be cheaper on the first day of the repeal of the Mobile Device Distribution Act, but it’s not. I plan to wait and see before buying."
On the first day of the repeal of the 'Act on the Improvement of the Distribution Structure of Mobile Communication Devices' (Mobile Device Distribution Act) on the 22nd, office worker Mr. Kim visited Yongsan Electronics Land and said this as he turned back. He visited the store expecting a so-called chaos with the sharp drop in mobile phone prices due to the repeal of the Mobile Device Distribution Act, but there was no significant movement yet. 
■ "A long battle of wits will unfold"
Despite the rumors that mobile phones could be bought cheaply, the so-called holy places like Gangbyeon and Sindorim Technomart were closed for regular holidays that day. Nevertheless, Yongsan Electronics Land and Seocho International Electronics Center, where mobile phone stores are gathered, were quiet. Other stores were also taking a breather and focusing on the pre-order opening of the Galaxy Z Fold7 and Z Flip7, which started that day. 
A store employee said, “There is no immediate big change just because the Mobile Device Distribution Act has been repealed,” and “It seems that a battle of wits between communication companies will unfold in the future.” Another store employee also said, “Although the common subsidy has increased by about 100,000 won compared to yesterday, the amount supported by each store does not differ significantly.” 
The three telecom companies confirmed the common subsidy along with the start of the pre-opening of the Galaxy Z Fold7 and Z Flip7 from that day. However, the actual subsidy set did not deviate significantly from the level announced during the previous pre-order. All three telecom companies maintained the common subsidy for the Galaxy Z Fold7 at a maximum of 500,000 won. KT and LG Uplus raised the common subsidy for the Galaxy Z Flip7 to 600,000 won only for number porting customers using high-priced plans. 
The additional subsidy, which can now be set without a cap, was not significantly different from the previous day. Various subsidies, such as 'payback', which were previously considered illegal, are allowed if specified in the contract, but there has not been a significant change yet. 
When porting numbers, the Galaxy S25 256GB and iPhone16 128GB are priced at 50,000 to 300,000 won, and the Galaxy Z Flip7 is priced in the 100,000 to 300,000 won range, while the Galaxy Z Fold7 is priced in the 1.2 to 1.3 million won range, based on a mandatory use of a high-priced plan for 6 months. Device changes were generally at least 100,000 to 300,000 won more expensive than number porting. 
■ "Subsidies increased significantly ahead of the repeal"
Industry insiders say that since the three telecom companies had already significantly increased subsidies ahead of the repeal of the Mobile Device Distribution Act, the possibility of mobile phone prices becoming significantly cheaper due to the repeal is not high. As each telecom company has limited marketing resources to invest and is recently focusing its capabilities on new businesses such as artificial intelligence (AI), it is expected that a balance will be found in the long term.
Of course, if one telecom company launches a short-term spot policy to attract customers, it cannot be ruled out that other telecom companies will respond. The industry sees the official launch of the 'Galaxy Z Flip7 and Fold7' on the 25th and the launch of Apple's iPhone17 in September as turning points that will determine the initial market atmosphere after the repeal of the Mobile Device Distribution Act.
An industry insider said, “If the Galaxy Z Flip7 does not sell as well as the Galaxy Z Fold7 in pre-order sales and inventory piles up, there is a possibility that telecom companies will heavily subsidize the Galaxy Z Flip7 to clear inventory.” Meanwhile, the Korea Communications Commission rechecked the education and delivery status of the changed system to the distribution network the previous day to prevent market confusion. The 'Mobile Device Distribution Act Repeal Response TF', formed with telecom companies, will continue to operate and market monitoring will continue.


solidkjy@fnnews.com Koo Ja-yun, Park Seong-hyeon, Reporters