"450,000 Won Extra for Galaxy S25"... KT Waives Early Termination Fees, Telecom Giants Enter Full-Scale Battle After Device Act Repeal

KT focuses on retention, while SKT and LG Uplus compete to attract departing customers
Subsidy war intensifies after termination fee waiver... Galaxy S25 payback reaches 400,000 won
Retailers say, "Lowest prices since repeal of the Mobile Device Dis

As KT decided to waive early termination fees for departing customers, competition to attract subscribers in the mobile telecommunications market is intensifying. With all three major telecom companies simultaneously ramping up efforts to attract and retain new customers, "free phones" and paybacks have become widespread, and the daily number of mobile number porting cases has surged. This is the first time since the repeal of the Mobile Device Distribution Improvement Act (commonly known as the "Device Act") that the three telecom giants have engaged in a full-scale subsidy battle, having previously been reluctant to increase subsidies.

According to the telecommunications industry on January 5, some mobile phone retailers over the past weekend offered a deal where customers switching to LG Uplus would not only receive Apple’s latest smartphone, the iPhone 17, but also get a "travel allowance" (payback) of 120,000 won. Considering the iPhone 17’s retail price is 1.29 million won, the subsidy alone amounted to 1.41 million won. For those porting their number to SK Telecom, the device price was set at just 10,000 won, making it virtually free. However, both deals required customers to sign up for a high-priced plan costing over 100,000 won per month for six months.

On the afternoon of the 3rd, customers are receiving mobile phone purchase consultations at a mobile phone sales store in Sindorim Technomart, Guro-gu, Seoul. Photo by Lee Myunghwan

Even higher subsidies were offered for Samsung’s Galaxy smartphones. With the next-generation model about to launch, the Galaxy S25, now considered a previous-generation device, came with a payback of up to 450,000 won for number porting. For the foldable Galaxy Z Flip 7, customers could receive up to 250,000 won back when purchasing via number porting.

KT, aiming to prevent customer churn, set higher sales incentives for device upgrades than for number porting. KT customers who stayed with the carrier and upgraded to the Galaxy S25 were offered a payback of 340,000 won. This contrasted with the other two telecom companies, which provided almost no subsidies for device upgrades. The device upgrade price for the iPhone 17 was also just 10,000 won. This is the opposite of the usual practice, where mobile phone retailers offer higher incentives for number porting to attract new customers, and appears to be an effort to retain existing subscribers.

Such aggressive customer acquisition tactics by mobile phone retailers began after KT’s business suspension started. In response to the hacking incident, KT announced it would waive early termination fees for departing customers from December 31 to January 13, and significantly increased subsidies to minimize customer losses. In response, SK Telecom and LG Uplus also increased their subsidies to attract customers leaving KT.

Retailers at the Sindorim Technomart mobile phone market in Guro-gu, Seoul, interviewed on January 3, unanimously agreed that this "market upheaval" began following KT’s early termination fee waiver. Sindorim Technomart is known for its concentration of so-called "holy land" stores that offer high subsidies. Mr. A, who operates a store there, said, "Since KT started waiving early termination fees, the subsidies from KT have increased significantly," adding, "The other two telecom companies have also increased their subsidies in response, making current prices the lowest since the Device Act was repealed." Another retailer, Mr. B, mentioned, "There are even rumors that all three telecom companies may further increase subsidies during KT’s early termination fee waiver period."

Amid this subsidy competition, the number of customers leaving KT continues to rise. According to the telecommunications industry, on January 3 alone, 21,027 customers left KT for other carriers. This was the first time that daily KT churn exceeded 20,000, indicating an accelerating trend. However, considering that some retail stores experienced delays in processing due to a surge in applications, the actual demand for number porting may have been even higher. From December 31 to January 3, a cumulative total of 52,661 customers left KT.

Of the customers who left KT on January 3, 13,616 (71%) switched to SK Telecom. The number of customers who switched to LG Uplus and to mobile virtual network operators (MVNOs) was 5,467 and 1,944, respectively. The concentration of number porting to SK Telecom appears to be due to its customer acquisition policies targeting departing customers. After last year’s hacking incident, SK Telecom restored the subscription tenure and membership status of returning customers. It is estimated that customers who left SK Telecom after the USIM hacking incident are now returning, coinciding with KT’s early termination fee waiver period. SK Telecom also previously waived early termination fees for a certain period after the hacking incident.

Some critics argue that KT is focusing solely on short-term subscriber acquisition rather than genuine compensation for customers. While KT’s customer reward program includes additional data and membership discounts, a universal rate discount for all customers was excluded from the compensation plan. This contrasts with SK Telecom, which offered a 50% discount on one month’s bill to all customers. An industry insider commented, "The number porting market had been quiet for some time, but KT’s early termination fee waiver has triggered an intensification of the subsidy competition among telecom companies," adding, "This trend is likely to continue until KT’s early termination fee waiver ends on January 13."

Meanwhile, KT will continue to run its "customer reward program" for subscribers who remain with the company after the early termination fee waiver period. From next month, continuing customers will receive benefits such as 100GB of data per month for six months, a 50% discount on roaming data for six months, a six-month subscription to an online video service (OTT), discounts on popular brands through KT membership for six months, and two years of safety and accident insurance.