Sindorim on the Eve of DanTong Act Repeal: "Free Phones" Abound Amid Number Portability War [Report]

Fierce Carrier Competition Offers Free Galaxy S25 Edge for Number Portability
Some Stores Provide "Payback" ... High-Priced Plans Required
Retailers Say "Limited Impact from DanTong Act... No Price Change Expected After Repeal"

"Sir, are you here to check out a phone? Please feel free to look around."

On the afternoon of the 21st, in the mobile phone store section at Sindorim Technomart in Guro-gu, Seoul. Each store greeted customers with signs reading "Holy Land" or "Lowest Price." The atmosphere was tense, with just one day left before the repeal of the Act on Improvement of Distribution Structure of Mobile Communication Devices (commonly known as the "DanTong Act").

The appearance of a mobile phone store at Sindorim Technomart in Guro-gu, Seoul, on the afternoon of the 21st. Photo by Lee Myunghwan

The mobile phone stores visited that day were operating as usual, but there was an unmistakable sense of tension. This was because the DanTong Act was set to be repealed the next day. With the act officially losing effect on July 22, the additional subsidies that these stores had been providing would become legal.

Under the previous DanTong Act system, only additional subsidies up to 15% of the official subsidy set by the mobile carrier were legal. For this reason, stores had been covertly offering subsidies that exceeded this limit. Notices prohibiting photography and audio recording were posted in each store, and prices were shown by entering them into calculators?measures taken to avoid crackdowns under the DanTong Act.

After the repeal of the DanTong Act, the "official subsidy" provided by mobile carriers will be changed to a "common subsidy" and can be disclosed at their discretion. The cap on additional subsidies from retailers, previously limited to 15% of the official subsidy, will also be lifted. If customers choose not to receive the common subsidy, they can still receive a 25% discount on their plan as before. Even if they choose the plan discount, they can now receive additional subsidies from the retailer?a benefit that was previously unavailable when selecting the plan discount.

The stores observed that day offered the lowest prices for customers switching carriers through number portability. The Galaxy S25 Edge, released less than two months ago (manufacturer's price: 1,496,000 KRW), was offered for free, and the flagship model Galaxy S25 Plus (1,353,000 KRW), released earlier this year, came with a so-called "payback" of 100,000 KRW. However, there was a condition: customers had to maintain a high-priced plan worth about 100,000 KRW for six months. Even the Galaxy Z Flip 7, which had not yet been officially released, could be pre-ordered for around 100,000 KRW if switching carriers.

So-called "Holy Land" stores, which mainly operate through closed online communities, offered even lower prices. The Galaxy S25 (manufacturer's price: 1,150,500 KRW) came with a 290,000 KRW payback for number portability, and the Z Flip 7 could be purchased for just 90,000 KRW. Even the iPhone 16 (1,250,000 KRW), which typically receives fewer subsidies, came with a payback of nearly 400,000 KRW.

Despite these "free phone" offers, store representatives explained that prices have actually risen compared to just a short while ago. This was because, during the period when SK Telecom suspended new sales due to USIM hacking, the three major mobile carriers engaged in fierce subsidy competition to retain and attract customers. One store representative said, "When SKT suspended operations, subsidies were provided even for device upgrades to retain customers, but now they are almost nonexistent. For the time being, due to the competition for number portability, device upgrades are unlikely to come with significant subsidies."

However, when asked whether phone prices would drop after the repeal of the DanTong Act on the 22nd, all store representatives shook their heads. They said there would be no significant price changes in the short term. Another store representative said, "Even after the repeal of the DanTong Act on the 22nd, similar pricing policies will be maintained. There will be no price difference if you come tomorrow or later."

After the repeal of the DanTong Act, mobile phone prices are expected to vary by store. Not only direct online stores operated by the three major carriers but also official dealerships will each set their own additional subsidies. This means that even among dealerships of the same carrier, there may be differences in sales prices. The Korea Communications Commission is considering ways to provide effective access to subsidy information for all consumers.