Bought Samsung's Latest Phone with a '570,000 Won' Discount... Am I a 'Hogang'? [Heotdari Economy]

⑥ Increased Official Subsidies... But You Must Consider the 'Total Maintenance Cost'
Official Subsidies Grow with Expensive Plans
Save Up to 2 Million Won Using 'Altteul Phone + Self-Device'

Editor's NoteMany people thought they were engaging in smart economic activities to get something better, but it often turned out to be a misstep. When deceived by corporate marketing or blinded by momentary gains, making wrong decisions ultimately harms the consumer. We aim to examine economic activities where people have made mistakes by misjudging everyday situations and ended up on the losing side.

The official subsidy for the 'Samsung phone' S24 series, which was previously up to around 200,000 KRW, has recently more than doubled. According to LG Uplus, the maximum subsidy is 575,000 KRW. However, consumers should not be overly pleased just because they received a discount on the device price. If you do not consider the 'phone maintenance cost' over a long period of more than two years, you might have ended up losing money.

Photo by Kang Jin-hyung

The official subsidies for the Galaxy S24 from the three major carriers vary from 55,000 KRW to 500,000 KRW depending on the plan. Adding the additional subsidy provided by retailers (15% of the official subsidy), the total subsidy consumers receive ranges from 63,250 KRW to 575,000 KRW. Currently, LG Uplus offers the highest subsidy.

Under the subscription type 'device change' and choosing the plan that maximizes the official subsidy, the '(Disney+) 5G Signature' plan (130,000 KRW), if you activate the S24 (512GB), you can purchase the smartphone with a retail price of 1,298,000 KRW at a discounted price of 723,000 KRW after a 575,000 KRW discount. The official subsidy usually applies to a 24-month contract. The total maintenance cost over two years is 3,843,000 KRW, which includes the device price (723,000 KRW) and communication fees (3,120,000 KRW). However, after maintaining the plan for six months, it is possible to switch to a cheaper plan.

As the three major mobile carriers simultaneously increased the official subsidies for Samsung Electronics' flagship smartphone, the Galaxy S24 series, on the 6th, a promotional banner related to the Galaxy S24 was displayed at a mobile phone store in Seoul. Photo by Yonhap News

Under the same conditions, if you choose the selective discount option that gives a 25% discount on monthly communication fees instead of the official subsidy discount on the device price, the discount is even greater. Choosing a two-year contract provides a total discount of 780,000 KRW on fees. The total maintenance cost over two years is 3,638,000 KRW, which includes the device price (1,298,000 KRW) and communication fees (2,340,000 KRW). If the device is purchased on installment, interest (annual 5.9%) will be added to the device price.

Consumers tend to think they have received a discount through either the official subsidy or the selective discount, but considering that the total maintenance cost over two years is in the mid-3 million KRW range regardless of the choice, it is hard to say it is 'cheap.' Some online stores known as 'holy sites' offer additional discounts, but these usually come with conditions such as mandatory maintenance of high-priced plans in the 100,000 KRW range for 4 to 6 months and subscriptions to various additional services.

Budget Phones + SIM-Only Plans... Maintenance Costs Cut in Half

On January 31, the official release date of Samsung Electronics' new flagship smartphone Galaxy S24 series, a citizen visiting Samsung Gangnam in Seoul is examining the S24 series. Photo by Yonhap News

The combination of 'budget phones + SIM-only plans' is currently gaining popularity among consumers looking to reduce communication fees. This refers to purchasing an unopened smartphone device from electronics stores or open markets and then using budget phone services that borrow the networks of the three major carriers to offer relatively inexpensive plans. The appeal of this combination is the low communication fees.

For example, consider using the Galaxy S24 with a budget phone and SIM-only plan combination. During the S24 series launch period on Samsung.com (February 1 to February 29), the S24 (512GB) SIM-only version can be purchased for 1,216,900 KRW. The plans were found on 'Moyo,' a budget phone comparison platform. Moyo offers plans based on users' data usage: ▲ 7GB (unlimited calls and texts) for 6,600 KRW ▲ 15GB (100 minutes calls, 100 texts) for 11,550 KRW ▲ 71GB (unlimited calls and texts) for 19,420 KRW ▲ 100GB (unlimited calls and texts) for 27,600 KRW per month. All plans can be used freely without contracts.

If you assume using the 71GB plan (19,420 KRW per month) for two years, the total communication fee amounts to 466,080 KRW. Adding the smartphone purchase cost, the total expenditure is 1,682,980 KRW. This is about 2 million KRW cheaper than buying with official subsidies or selective discount plans.

Of course, 'budget phones + SIM-only plans' are not always the best answer. The advantages and disadvantages can vary depending on the consumer's data, text, and call usage patterns, whether combined discounts apply, and gift benefits. To be a rational consumer, you must first select a plan based on your usage patterns and then determine whether the carrier offering official subsidies and selective discounts or the 'budget phone + SIM-only plan' combination is more economical.