[Report] "Effect of the repeal of the Dantong Law? The bigger problem is no customers"… Lukewarm response at the mobile phone mecca

'Seongji' Seoul Gangbyeon Technomart Visited on the 27th
"Frozen Consumer Sentiment Not Thawed... Less Interest Than Early This Year"

"Maybe because of the martial law, there are even fewer people"

At around 2 p.m. on the 27th, I visited Gangbyeon Technomart in Seoul. Although the bill to repeal the Act on the Improvement of Distribution Structure of Mobile Communication Terminals (hereinafter referred to as the DanTongLaw) passed the National Assembly plenary session the day before, the market’s expectations were not high. The representative of a mobile carrier store, A, told me to check out other stores. The stores were rarely open, and even then, the merchants were just staring at their phone screens due to the lack of customers. When a single customer passed between the stores, voices immediately echoed like a round chant, telling them to just check the prices and leave. Gangbyeon Technomart is known as a so-called ‘holy place’ where phones can be purchased cheaply due to illegal subsidy support.

Around 2 p.m. on the 27th, I visited Gangbyeon Technomart in Seoul. Although it was the day after the bill to repeal the Mobile Device Distribution Improvement Act passed the National Assembly plenary session, there were hardly any customers at the store. Photo by Hwang Seoyul chestnut@

With the repeal bill passing the National Assembly plenary session the day before, the obligation to disclose device subsidies and the regulation limiting additional subsidies by retailers to within 15% of the disclosed subsidy were abolished. The selective contract discount system, which allows consumers who do not receive subsidies to get a 25% discount on current rate plans, remains in place. Other bills that could cause consumer discrimination will be transferred to the Telecommunications Business Act. The repeal bill will take effect six months after promulgation.

What weighs down the expectations for the repeal of the DanTongLaw is the frozen consumer sentiment. The representative of store B said, "Earlier this year, customers had expectations for the repeal of the DanTongLaw and asked if prices would really get cheaper, but this time there is none of that." He added, "It’s hard to tell whether the consumers who come here don’t care much about the DanTongLaw or if the overall consumer sentiment has shrunk."

Consumers who visited with some expectations for price changes also gained little. Mr. Lim (32, male), who came to buy a Galaxy Z Flip6, said, "Maybe because there weren’t many customers, merchants were aggressively soliciting me whenever I walked by, which was burdensome." He added, "I came hoping prices would be a bit cheaper than the day before since the DanTongLaw passed, but they were about the same." The price list Mr. Lim showed that day offered a price 50,000 won lower than the day before if purchasing the model with number portability (changing carriers), but the place where he actually bought the phone told him "there’s no difference from the day before."

However, there was a reaction that the burden of evidence collection and crackdowns for DanTongLaw regulations has lessened. The representative of store B said, "Since early this year, as awareness of the DanTongLaw repeal bill formed, the burden of evidence collection decreased, creating a certain atmosphere." He added, "From then on, sellers competed more confidently, which is true." He said, "After the repeal of the DanTongLaw, regulations targeting groups that disrupt the market, such as online sales, are expected to continue."