Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Jon Matz who wrote (10587)	5/23/2000 9:48:00 AM
From: slacker711	Respond to of 13582

Korean subsidies to end in June... hk.co.kr Handset Subsidies to Be Banned - from June to Cool off Overheating Market_ By Yang Sung-jin Staff Reporter The Ministry of Information and Communication yesterday announced it would ban handset subsidies beginning in June, raising the initial subscription fee by as much as 300,000 won. In a press conference, Information and Communication Vice Minister Kim Dong-sun said, ``The new policy will cool off the overheating mobile-phone market as well as block over- consumption by the youth.'' Kim said mobile carriers had long shouldered handset subsidies, making it extremely cheap to subscribe to mobile services and speeding up the rate of replacement. ``As a result, workable handsets have been replaced by new models too fast, worsening the trade imbalance and increasing the waste of resources,'' he noted. According to the ministry, five mobile carriers have poured a total of 6.59 trillion won into subsidies to expand their market share since 1998. Such costly marketing strategies, coupled with cheaper initial subscription fee, created one of the world's most successful mobile phone user bases _ over 27 million subscribers out of a population of 48 million. The vice minister said the impressive growth of the mobile market in Korea was now facing a string of adverse effects as the abundance of cheap handsets propelled by the subsidies was worsening the country's international trade figures. Kim said the volume of mobile handset parts imported from abroad rose to 3.1 trillion won in 1999. In the first four months of this year, the imports came to 1.25 trillion won, a 28 percent increase on a year earlier. At the same time, excessive marketing by mobile carriers led to poor profitability, he said. Except for SK Telecom, the dominant player, the other four mobile-phone carriers combined saw their deficit rise to 1.23 trillion won last year. The winners, however, would not be consumers but mobile- phone operators. Given that 27 million handsets are circulating, mobile phones have become a necessity. But consumers have to pay an extra fee of as much as 300,000 won to buy the same handset from June. While the mobile phone carriers may benefit from the money saved with the abolition of