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Small Telecoms Thrive After South Korean Giants Suspended

May 15, 2014

According to a recent report at Korea Bizwire, the budget phone industry in South Korea is booming. At the expense of the telecommunications giants in the country which reportedly are intermittently under suspension, the lesser-known companies are beginning to take over.

The Korea Telecommunications Operators Association released numbers earlier this month that point to the rise in new budget phone subscribers this year. Every month since February has seen a month-to-month gain in subscribers, starting in February with 69,096 subscribers, 87,000 in March, and 111,897 in April. For last month alone, the report shows, that means that approximately 3,730 people signed up for budget phones every day.

The suspensions for the major telecoms in South Korea come at the hands of the country's telecommunications regulating body. Reports show that it placed SK Telecom (News - Alert) and several other mobile carriers on a 45-day suspension that began in April and barred them from accepting new customers. This judgment came after the companies were found to have provided illegal phone subsidies.

Notable budget phone carriers include Enex Telecom, CJ Hello Mobile, KCT, Free Telecom, and Prepia. They are all using tactics to draw the eyes of consumers in one way or another. Some are making their products more visually appealing so that they stand out on shelves that carry a range of other phones. Others are using subscriber deals to get their phones into customers' hands.

Some plans are reportedly up to 70 percent cheaper than what other major providers offer. The phones they provide are no longer always within the 2G and 3G tiers, either. They are competing with the giants by offering LTE (News - Alert)-capable phones including some smartphones, such as the Samsung Galaxy S5, that battle directly with the height of competition.

Possibly as a move to capitalize on its previous suspension, SK Telecom pursued selling the new Galaxy two weeks before Samsung (News - Alert)'s official global launch of the phone. The early release allowed the company to begin selling the phone in late March before suspension rules halted it from doing so in early April.

Edited by Rory J. Thompson
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