Phone Carriers In Korea Accused Of Illegally Subsidizing iPhones

(iDiapo)

Here in the United States, our mobile phone carriers are trying to wean consumers off phone subsidies, so we will begin to understand how much our phones really cost. Meanwhile, over in Samsung country, stores have been charging artificially low prices for the new iPhone 6 and 6 Plus, something that is kind of illegal in South Korea.

CNET reports that the entry-level model of the iPhone 6 with 16 GB of memory sells for about $730 in South Korea, not much more than its $650 sticker price here. Carriers are allowed to provide subsidies that take the price as low as around $555, depending on what kind of service plan a customer buys. They aren’t supposed to go lower than that…but that hasn’t stopped some retailers.

The new iPhones went on sale in Korea on Friday, and some customers who paid full price are already complaining to the government. Customers say they were able to buy the phone for as little as $92, and they learned about the sales through what CNET describes as “coded SMS messages” and posts to forums that disappeared so they would leave no trace.

Phone subsidies are limited in Korea in order to prevent bigger handset manufacturers from subsidizing customers’ purchases and unfairly dominating the market. The Korea Communications Commission has already contacted executives at the country’s three major carriers, but they in turn blame individual retailers for offering huge subsidies in a super-competitive market for phone customers.

iPhone 6 sees illegal handset subsidies strike back in Korea [CNET]

by Laura Northrup via Consumerist