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Technology Stocks : The New Qualcomm - a S&P500 company
QCOM 151.87-0.6%12:56 PM EST

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To: LBstocks who wrote (3142)11/10/1999 2:05:00 AM
From: LBstocks  Read Replies (1) of 13582
 
Korean royalties paid to QCOM>
Frequent handset switching fuels environmental concerns
Frequent switching of mobile handsets driven by wireless carriers' handset subsidies and short intervals between the introduction of new models by handset manufacturers is causing environmental damage and artificially shortening handset life-span.

Subsidies have made mobile handsets virtually free when people sign up for services, as companies are engaged in cut-throat competition to boost their subscriber base. In fact, the country's five wireless operators have spent over 5.08 trillion won from 1996 through the first half of this year in handset subsidies, according to the Ministry of Information and Communication and industry sources.

Some customers falsely report their handsets missing or switch from operator to operator in pursuit of the latest model, because the initial joining fee is relatively cheap and handsets are almost free.

Leading handset manufacturers fuel the fire by releasing new models in short intervals and make the new models incompatible with older batteries.

The unused handsets that are abandoned in favor of newer ones lie in waste along with the batteries although they are still in good condition, leading to concerns that they cause damage to the environment.

The industry estimates that there are more than two million handsets that have been put out of use prematurely and that the figure could reach more than five million next year.

Frequent changing of mobile handsets also costs hard-earned cash. Handset manufacturers pay Qualcomm 4,000 won in royalties for each handset they put out, and the cost of imported parts, about 147,000 won, constitute 42 percent of the manufacturing cost.

Production of mobile handsets last year, which totaled 10 million units, led to some 1.84 trillion won leaving the country in royalties and as payment for imported parts. The figure for this year is estimated at 2.25 trillion won with some 14 million units being produced.

To prevent environmental damage and the drain on funds, the wireless operators should cut back on handset subsidies and make consumers aware that handsets are not free, industry observers point out.

The handset manufacturers should also come up with models that can be used with batteries from older models and thereby reduce damage to the environment, urge consumer groups.



Updated: 11/08/1999
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