Carriers reduce handset prices before Galaxy S7, G5 launches

By Yoon Sung-won

Telecom companies have cut down the prices of handsets to dispose of inventory before new smartphones from Samsung Electronics and LG Electronics are launched.

SK Telecom, KT and LG Uplus said Thursday they have reduced the price of the Nexus 5X, the latest Google reference smartphone manufactured by LG Electronics, to 379,500 won ($327.27). The same model was priced at between 475,200 won and 508,200 won before the price cut.

Adding to the price cut, KT introduced on Tuesday a 330,000 won subsidy for those who purchase the Nexus 5X with a data subscription plan priced 29,900 won or higher per month. This is the maximum subsidy that is allowed under the Telecom Act. With the extra subsidy following a subscription contract, customers can buy a Nexus 5X, which was launched here just four months ago, without paying for the device.

“The Nexus 5X is drawing a very favorable response in sales,” an official at KT said. “The handset is almost out of stock in several outlets but it is still available as we work to secure our inventory level.”

SK Telecom and LG Uplus have set around 110,000 won in subsidies for the subscribers of the monthly plan priced at a similar level.

The telecom companies have already cut the prices of the Galaxy S6 and S6 Edge, as the popularity of the two models may drop once Samsung Electronics rolls out the Galaxy S7 and S7 Edge.

The company plans to launch the S7 series on March 11 and LG Electronics will roll out the G5 later this month or early next month.

All three mobile carriers have provided the maximum subsidies to the S6 Edge for more than a month already.

They are also selling budget smartphones such as Samsung Electronics’ Galaxy Alpha, LG Electronics’ Class and Huawei’s Y6, almost for free. Expectations are that the telecom companies may expand the price cuts to a wider range of handsets aiming at reducing stocks before the launch of the new smartphones.

“Almost 20 smartphones will be available for free this month,” a telecom industry source said. “This will mean wider options with cheap prices for those not seeking the latest smartphones with the best hardware specifications possible.”