"Use AI Phone for Around 20,000 Won per Month"... Xiaomi Partners with Budget Phone Providers (Comprehensive)

KT M Mobile Introduces Xiaomi's New Product to the Budget Phone Market
"Affordable Devices and Plans"
Targeting the 10 Million-Subscriber Budget Phone Market with Cost-Effectiveness Strategy

Xiaomi, which declared its entry into the domestic market, has partnered with KT’s budget phone service. This move is seen as an early “cost-effectiveness (performance-to-price ratio) strategy” for entering the Korean smartphone market.

According to industry sources on the 24th, KT M Mobile, the second-largest budget phone operator, began selling Xiaomi’s newly released AI smartphone, the Redmi Note 14 Pro 5G, bundled with budget phone plans starting from the 22nd. The initial stock of Redmi Note 14 Pro units sold by KT M Mobile is around 100, with plans to increase based on market response.

The reason Xiaomi teamed up with a budget phone operator is to maximize the advantage of “affordable devices and plans.” A KT M Mobile official said, “If you sign a 2-year contract and use a monthly plan costing 21,000 KRW, you can get the 400,000 KRW Redmi Note 14 Pro device for free.” The three major telecom companies also started selling the same model on the same day, but customers must subscribe to a 55,000 KRW monthly plan for two years to buy it for 70,000 KRW. Compared to budget phones, the cost burden is higher.

This is not the first time a budget phone operator has sold Xiaomi smartphones. In the past, some operators sold them in a distributor (importer) format. The difference now is that sales are conducted through official contracts. A Ministry of Science and ICT official explained, “Previously, with distributor-imported foreign phones, consumers had difficulty receiving compensation when issues arose during sales. Now, purchasing through telecom operators officially contracted with Xiaomi means the operators take responsibility, which is advantageous for consumers.”

Industry insiders see this contract as a milestone for the sale of foreign devices in the budget phone market. Korea is known as the “graveyard of foreign phones,” with no overseas smartphones preferred by consumers except Apple’s iPhone. The IT industry estimates the domestic market share of foreign phones other than the iPhone to be below 1%.

Ha Chang-jik, Secretary General of the Korea Budget Telecom Operators Association, said, “About 80% of budget phone subscribers use only SIM cards without devices. While budget phone operators have focused solely on selling plans, signing a contract for new devices at this level is meaningful.”

A telecom industry official said, “The Redmi Note 14 Pro is competitive in terms of features, and combined with budget phone plans, it offers high cost-effectiveness. It’s worth trying to compete in the budget phone market with 9.5 million subscribers.” However, the official added, “It will have to compete with mid-range phones like Samsung Electronics’ Galaxy A35, and overcoming the image of being a Chinese brand remains a challenge.”

Xiaomi established its Korean subsidiary on the 15th and announced plans to expand its distribution network. It plans to open an AS center in the first half of this year to address weaknesses and open offline stores in Seoul. On its own mall, it sells mid-range smartphones such as the Redmi Note 14 Pro 5G (400,000 KRW) and Xiaomi 14T (600,000 KRW) as unlocked devices.

However, opinions inside and outside the industry remain divided regarding long-term success prospects. The government is concerned about negative impacts on the domestic device industry, and telecom companies appear hesitant about cooperating with Chinese firms. Yoo Sang-im, Minister of Science and ICT, recently visiting the mobile phone distribution market, said regarding Xiaomi’s impact on the domestic market, “The entry of foreign phones increases consumer benefits positively,” but also noted, “The influx of cheap phones could make the domestic device industry more difficult.”

The three major domestic telecom companies are lukewarm about selling Xiaomi products. A telecom company official said, “The consensus is that maintaining long-term partnerships with domestic manufacturers is more desirable in terms of risk management and the industrial ecosystem than foreign phones like Xiaomi.” Another telecom official added, “Xiaomi is expected to gain more attention in the budget phone market, where demand for lower prices is concentrated rather than among telecom operators.”