Samsung Galaxy S5 sales may become a casualty in Korean carriers’ war for subscribers.
The Korean telecom minister recently issued a 45-day ban on local Korean carrier phone sales. The ban, scheduled to stagger between major carriers from March 13 to May 19, comes on the heels on Korean carriers’ attempts to illegally subsidize smartphones in major markets.
The subsidies were a result of fierce competition among Korean carriers vying for more customers in a market where 70 percent of people already own a smartphone.
Case in point: In a bout of “smartphone chaos” in February, some companies reportedly announced subsidies of up to $1,100 in Korean markets for the Galaxy S4. The sale went on for four days, in which 112,000 customers switched carriers to get new phones, according to the Korea Telecommunications Operators Association.
From April 5 to May 19, Korea’s highest subscribed carrier, SK Telecom, has been banned from signing up and selling devices to new customers. The carrier was also banned from upgrading phones where service contracts are less than two years old.
Other major carriers such as KT have been banned from March 13 to April 26, and LG UPlus has been banned from March 13 to April 4 and April 27 to May 18.
Analysts say that although the Korean market accounts for a small portion of Samsung’s market, the need to maximize sales in the first 3 months could be hurt by the ban.
In the mean time, Samsung has some handsome perks lined up for Galaxy S5 users come April 11, ahead of a sales ban on local carrier sales that could hurt initial sales. Today, the giant cell phone manufacturer announced $600 worth of pre-paid and discounted premium subscriptions to services such as LinkedIn’s professional social network, Dropbox sharing, and Paypal payment.
Samsung has not returned a request for comment at this time. We’ll update when we hear back.