Starting Today, Galaxy S21 Activation... Up to 500,000 KRW Official Subsidy

Opening of Service for Pre-Registered Customers Begins

[Image source=Yonhap News]

[Asia Economy Reporter Joselgina] Samsung Electronics' new smartphone Galaxy S21 began activation for pre-order customers on the 22nd. The official subsidies from the three major mobile carriers were set at up to 500,000 KRW, more than double that of the previous model. However, for consumers, it is generally more advantageous to receive a 25% selection discount rather than the official subsidy for most plans.

According to the industry on the 22nd, SK Telecom, KT, and LG Uplus set the official subsidy for the Galaxy S21 at up to 500,000 KRW. When LG Uplus announced subsidies ranging from 268,000 to 500,000 KRW per plan on the pre-order start date of the 15th, KT and SK Telecom, which had initially set lower subsidies, also raised their amounts within a few days. Considering that the official subsidies for Galaxy S20 and Galaxy Note 20 from the three carriers were around 240,000 KRW at most, this is more than double.

LG Uplus, which fired the starting shot for the subsidy competition, is effectively providing subsidies of 500,000 KRW for all its main products in the 80,000 KRW monthly plan range. KT raised its official subsidies from the initial 100,000 to 240,000 KRW to 262,000 to 500,000 KRW in just one day. SK Telecom, joining the increase, adjusted its subsidies to 225,000 to 500,000 KRW.

With official subsidies now available up to 500,000 KRW, consumers' actual purchase price, including additional distribution subsidies, drops to the low 400,000 KRW range. The Galaxy S21's retail price is 999,900 KRW.

Consumers who purchase smartphones through carriers can choose between the official subsidy and a 25% selection discount. If they opt for the subsidy discount, they must pay the remaining installment amount over 24 months. SK Telecom and KT find the selection discount advantageous across all plans, while LG Uplus's advantage depends on the plan.

For example, subscribing to LG Uplus's 85,000 KRW monthly plan allows a maximum discount of 575,000 KRW, including the official subsidy and a 15% additional distribution subsidy. In this case, the actual purchase price is 424,000 KRW. If a subscriber of the same plan chooses the selection discount instead of the official subsidy, they receive a 25% discount on the monthly fee for 24 months, totaling a benefit of 510,000 KRW.

There is also a growing trend of consumers purchasing smartphones directly without going through carriers and opting for relatively cheaper MVNO (Mobile Virtual Network Operator) plans. In this case, they do not have to subscribe to a 5G plan necessarily and can use a 5G phone on an LTE plan. In this pre-order period, while the reservation sales volume of the three major carriers competing with up to 500,000 KRW official subsidies was below previous years, the share of 'self-supplied' (jagupje) phones reportedly tripled.