The discounted price was largely attributable to the “substantial subsidies” provided by the telecom companies. Whenever there were transitional changes for wireless network standards, mobile carriers here have often pledged to bear the cost of changing to new smartphone models.

For example, SK Telecom has offered up to 770,000 won ($644) in subsides when a consumer subscribes to its most expensive 5G data plan. Combined with additional benefits from vendors, the V50 ThinQ’s price could be lowered to 300,000 won from its original price of 1,119,000 won.

“Rather than losing subscribers to competitors, telecom companies prefer to sacrifice their short-term benefits,” said another industry watcher. “So, the competition comes down to who has more money and the largest company will win eventually.”

The race to secure more subscribers has even resulted in the venders providing 5G smartphones for free. For a few days since V50 ThinkQ rolled out, online communities were filled with stories of purchasing the smartphone for free at stores in downtown Seoul.

The government has issued warnings against “illegal subsides” by mobile carriers. The Korea Communications Commission has threatened to impose punitive fines on telecom firms who to offer more subsides than they have publicly announced.

However, industry watchers played down the prospect of the government enforcing such a restrictive measure. As long as 5G network expansion is a major policy initiative, they said, it would be hard to crack down on the efforts to increase subscribers.

“There is consensus between the government and mobile carriers on expanding the 5G market,” said another official from a local telco company. “The government will take a wait-and-watch approach for a while.”

(jasonyeo@heraldcorp.com)