Smartphone or no phone

Consumers deprived of choice to use ordinary phones

By Yoon Ja-young

Park Hee-sun, an elderly housewife in Seoul, recently switched to a smartphone but not because she wanted to.

As the battery is the life of any mobile phone, the handset that she had been using for three years often died quickly so she decided that it was time to get a new handset. At the mobile shop in Bangbae-dong, southern Seoul, where she lives, she looked for an ordinary feature phone, but only two or three models that had been released a couple of years ago were available. The vendor recommended opting for a smartphone. When she hesitated over the price, he said that smartphones were actually cheaper. Some less popular smartphones were actually free if she subscribed to an unlimited data scheme.

Only two years after introduction, smartphones users are quickly expanding in number _ already surpassing 20 million, here. The country has marked the steepest growth of infiltration, but hidden under the surge are consumers who have been forced to switch to smartphones.

Subsidy, commission distort handset market

Lee Ju-hong, a director for the Green Consumer Network, points out that handset prices are set by subsidies, not by the market. “Both manufacturers and mobile carriers provide subsidies, and they give very little or no subsidy at all for feature phones,” he said.

Prices are also related to sales commissions. “If the commission for selling a smartphone is as high as that for selling ten sets of feature phones, then a salesperson has no motivation to make ten times the effort. It is natural for him to focus on smarpthones,” Lee said.

“As manufacturers and mobile carriers boss the retail market around through subsidies and commissions, it ends up narrowing the choices for consumers,” he added.

Mobile carriers are pouring in trillions of won in subsidies for smartphone sales to generate more revenue. In the case of SK Telecom, for instance, the average revenue per feature phone subscriber was 28,000 won in the second quarter, while that for a smartphone user was 50,000 won.

Manufacturers are avoiding feature phones as they are now deemed unprofitable. Pantech and Motorola released no feature phones here this year. Samsung Electronics and LG Electronics also plan to decrease the ratio of features phones in their lineup, to expend their energy in smartphones instead.

For those who don’t need it however, smartphones are a waste of money. “Smartphones can make our lives more convenient, but not everyone needs it. Senior citizens and young children, for example, may only need basic functions,” Lee said. He said the consumers are being denied a choice as the issue is being approached only from the perspective of the industry.

Those who need only to make voice calls and send text messages have no use for a smartphone which usually amounts to a minimum bill of over 50,000 won a month, even if the device is free. Voice calls and text messages cost roughly 15,000 won a month.