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Galaxy S5 sales robust despite carriers' suspensions

All Headlines 09:24 April 02, 2014

SEOUL, April 2 (Yonhap) -- Local sales of Samsung Electronics Co.'s new Galaxy smartphone lineup are sound, despite limited availability through carriers and crackdown on subsidies for new subscribers, industry sources said Wednesday.

The daily average sales of the Galaxy S5, launched in the home market on March 27, came to around 7,000 units, slightly below the 8,000 units posted by its predecessor Galaxy S4 and far behind the 10,000 units for Galaxy S4 LTE-A.

The rollout of the new smartphone was befuddled by business suspensions of mobile carriers, who were banned from collecting new subscribers for paying illegal subsidies to lure clients.

Industry watchers say the sales were also remarkable given that only one of the country's three carriers are currently in full operation and that the carriers are no longer allowed to pay out subsidies.

They say the relatively low price is likely encouraging sales. The Galaxy S5's local selling price is currently fixed at 866,800 won (US$820), below the Galaxy S4's initial price of 899,000 won, despite its updated features.

SK Telecom Co., the top mobile carrier here, alone released the model at its home turf two weeks earlier than scheduled, a decision that Samsung called "arbitrary."

SK made the move as it would have to close its doors from April 5, a week before the initial official launch date of the smartphone.

The Galaxy S5 was originally intended to be released on April 11, as announced at the Mobile World Congress in Barcelona, Spain, in February.

Following SK's move, KT and LG Uplus also rushed to release the Galaxy S5, but their sales were limited as the business suspensions only allowed them to promote the smartphone to users with handsets two years or older or those who lost or misplaced their devices.

The Ministry of Science, ICT and Future Planning imposed 45-day business suspensions on the three mobile carriers over different periods for providing illegal subsidies to new users changing their service providers, worsening the competition that were hurting their business and distorting the market.

SK Telecom will be suspended from April 5 to May 19, and KT is banned from attracting new customers from March 13 to April 26. LG Uplus was ordered to close down from March 13 to April 4 and from April 27 to May 18.

The Korea Communications Commission said it will suspend the businesses of SK Telecom and LG Uplus for seven and 14 days, respectively, for the illegal subsidies after the end of the ICT ministry's disciplinary move.


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