The Ministry of Science and ICT and the Korea Communications Commission encourage competition among mobile carriers by allowing differential payment of handset subsidies before the Mobile Device Distribution Act is repealed.

The Korea Communications Commission announced that it approved a partial amendment to the Enforcement Decree of the Act on the Improvement of Distribution Structure of Mobile Communication Devices (hereinafter referred to as the "Mobile Device Distribution Act") at a Cabinet meeting held on March 6.

Second Vice Minister of Science and ICT Kang Do-hyun inspected the situation of the mobile device distribution market following the push to abolish the Mobile Device Distribution Act and listened to the opinions of the three mobile carriers and retailers.

The main point of the plan is to induce subsidy competition among mobile carriers by providing differentiated subsidies based on the type of subscription, such as number portability, new subscriptions, and device changes. Starting as early as the middle of this month, customers who switch their current carrier to another will be able to receive up to 500,000 won in support. The frequency of official carrier subsidies, currently twice a week, will also be changed to 'once a day'.

The Korea Communications Commission explained that although it has been continuing efforts to persuade the National Assembly since expressing its intention to abolish the Mobile Communications Business Act last January, it has decided to preemptively amend the enforcement decree in order to create conditions that can revitalize marketing competition among telecommunications operators even before the repeal of the Act.

This amendment to the Enforcement Decree allows for the payment of subsidies in accordance with standards determined and notified by the Korea Communications Commission, taking into account the costs borne by users and the expected profits of mobile carriers when changing carriers, through the establishment of a new exception provision in the proviso of Article 3.

The amendment to the enforcement decree was subject to legislative notice starting February 22, passed by the committee on February 27 and the vice-ministerial meeting on February 29, and was approved at the Cabinet meeting today.

Chairman Kim Hong-il stated, “Through this amendment to the enforcement decree, we will revitalize autonomous marketing competition among telecommunication operators to ensure maximum benefits for users when purchasing handsets,” adding, “Moving forward, we will completely liberalize competition among operators by abolishing the Handset Distribution Act so that the public can fully enjoy the benefits of service and quality competition.”

Kang Do-hyun, the Second Vice Minister of Science and ICT, stated, “We will abolish the Mobile Device Distribution Act to promote competition among operators so that the benefits of easing the burden of handset costs can be passed on to the public,” and “at the same time, we will actively pursue various measures to lower telecommunication costs through promoting the use of used phones, expanding the release of mid-to-low-priced handsets, and diversifying mid-to-low-priced 5G rate plans.”