Mobile phones are to get a little cheaper next year after years of spiraling prices. Against all market logic, the average price of cell phones has risen 30 percent over the last five years, from an average of W286,000 (US$1=W927) in 2001 to W371,000 in the first half of the year. Many brand-new models cost more than W500,000. But now telecoms are finally looking for a supply of low- to medium-priced mobile phones.

KTF plans to start providing cheaper imported phones next year. Currently only domestic makers like Samsung Electronics and LG Electronics provide handsets to KTF. The phones will cost W100,000 to W200,000. KTF CEO Cho Young-joo admitted that domestic handsets are expensive, although their quality is excellent. He said foreign low-to-medium priced phones will give customers more choice.

There will also be what in Korea seem ultra-cheap phones for less than W100,000. ROSE Telecom president MC Kim said his company can make cell phones costing W30,000 if telecom providers ask. The company recently won an order to export 6 million mobile phones at US$30 per unit to India. The bar phone has a 1.5-inch color monitor and performs all the basic functions: text messaging, downloading ring tones and storing 500 phone numbers. “Many domestic customers ask the company to sell the product here,” Kim said. “A lot of people don’t use the wireless Internet or the camera. Cell phones can get much cheaper if needless functions are removed and the production process simplified.”

But the big manufacturers Samsung Electronics and LG Electronics insist on producing profitable premium models, saying only high-end models will sell to picky Korean consumers who have sophisticated tastes in phones. In fact, Korean consumers change their cell phones every 18 months. “The age has gone when people use cell phones only to make calls,” Samsung Electronics’ telecommunication network business chief Lee Ki-tae says. “Convergence phones that function as a computer, camera and game machine are gaining popularity.”

Telecom providers are also reluctant to jump on the cheaper cell phone bandwagon because they don’t want low-priced voice phones to proliferate just when they have invested an enormous amount of money in building sophisticated wireless data networks. Even in the case of KTF, the cheap imported handsets will account for no more than 10 percent of the company’s total purchases. An SK Telecom staffer admitted that demand for low-priced cell phones exists, especially among senior citizens and housewives. The company may supply low-priced cell phones for those who don’t have a mobile phone yet, he added.

(englishnews@chosun.com )