Gov’t lifts subsidy limits

[Anchor]

The prices of mobile phone devices, which amount to millions of won, are expected to drop significantly in the future.

The government has decided to abolish the "Mobile Device Distribution Improvement Act" starting next week to reduce the burden of communication costs.

Let's take a closer look at how this will change and what to watch out for, with reporter Kim Min-cheol.

[Report]

A mobile phone store in Seoul.

With the launch of a new model approaching on July 25, customers are continuing to visit.

[Customer in Gangnam, Seoul: "(The new model) is much lighter and thinner, which I personally find fascinating, so I see that positively."]

However, the price of the device is a burden.

Currently, the manufacturer's suggested retail price for a 512GB model is about 2.5 million won, with a maximum subsidy of 575,000 won.

This is the total amount combining the public support from the telecom companies and an additional maximum 15% support from the distribution network.

However, starting from July 22, it seems that the additional support will increase significantly.

This is because the government is abolishing the existing device distribution law, which removes the cap on subsidies.

As a result, stores will be able to freely set the subsidies, and the amount of support can be determined based on the type of subscription or rate plan.

[Kim Mi-jeong/Director of Communication Market Research, Korea Communications Commission: "Competition among telecom companies will be activated, allowing you to purchase devices at a lower price...."]

User protection measures will be strengthened.

The terms of use related to the payment of subsidies, such as rate plans or additional services, must be specified in the contract.

However, how to provide benefits to vulnerable groups, such as the elderly, remains a challenge to be addressed.

[Lee Seong-yeop/Professor at Korea University Graduate School of Technology Management: "Operating consultation desks, and providing guidance through phone calls as well as text messages, so that vulnerable groups can be better protected...."]

The government will launch on-site inspections alongside the implementation of the new system to address issues such as forced high-rate plans and unnecessary add-on services.

This is KBS News, Kim Min-cheol.