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South Korea Reforms Mobile Phone Sales Market

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The South Korean government has passed a law that should see a reform of how mobile phones are sold in the country.

The Handset distribution bill was originally proposed last May, but has finally been passed into law, and will now come into effect this October.

Overall, the government hopes to promote lower handset prices and increase the transparency of handset subsidies and rebates. It expects that this will lead to cost cuts for consumers.

As consumers will also be able to choose from lower tariffs instead of handset subsidies, there is an expectation that the new bill could slow down handset sales, in favour of cheaper phone bills.

However, the decline in handset subsidies should more than offset any tariff erosion for the mobile networks financial results.

However, the bill should be negative for handset manufacturers and sales agents. Manufacturers are concerned about lower handset sales. And, agents oppose the bill as reduced handset sales would lead to less incentive payments.

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Tags: Korea