- Volume 19 Issue 8
The government has the responsibility to prevent abuses of monopoly and promote competition in order to maximize consumer welfare. The government should address the asymmetry in the information as much as possible and ensure consumer choice. The subsidy seems to reduce the burden on the consumer service charges and handset prices but it actually distorts the market through price discrimination. The government caused the principal-agent problem by neglecting their appropriate role to prevent distortion of the mobile telecom market. The money used as subsidy is part of excess profit and could be transferred to down the price of mobile phone and charges and it would become a benefit to consumers. Separate announcement of subsidies by Mobile Communications Terminal Distribution Structure Improvement Act is a little developed policy but it was not actually realized. The market price close to that from perfect competition structure is plausible, ultimately.
Mobile telecommunication phone;Cell phone;Subsidy;Price Discrimination;Principal-agent;Political Economy;Mobile Communications Terminal Distribution Structure Improvement Act;Separate Announcement
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- Sawoong Kang, "Welfare Effect of Behavior-based Handset Subsidy Discrimination," International Telecommunications Policy Review, vol 21 no. 2, pp. 57-85, 2014.
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- Mobile Communications Terminal Distribution Structure Improvement Act, Enforcement Date 28. May, 2014, Act No.12679, 1. Oct, 2014.
History of Cellular Phone Subsidy, Etnews.com, 2000. 5. 25, http://www.etnews.com/200005250118.
- Jin Shin, "The study on the fair trade in the mobile phone market," Journal of the Korea Institute of Information and Communication Engineering, vol. 17, no. 9, pp.
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