Cell phone manufacturing & distribution market distortion…Complete self sufficiency system to expand
[ Kim Ji Yeong kjy@ ] | 2017-09-28 10:54:07
It is pointed out that the self-sufficiency which separates the handset sales and telecommunication services that are being promoted in political circles is going to up. It is possible to make the mobile communication market more confusing rather than to take advantage of the original purpose of inducing the price reduction of handsets. It is a concern that not only the retailers and distributors of three mobile telecommunication companies but also domestic mobile phone manufacturing and distribution companies cannot actually distribute handsets and distort the market if full self-sufficiency is introduced as such.
According to industry sources on September 27, SK networks will not be able to maintain a business that supplied handsets to SK Telecom`s retail stores, given the introduction of fully self-sufficient handsets, which are currently being discussed in political circles. LG Electronics is also a related party of LG U Plus.
SK Telecom, KT, LG U Plus, and other related parties in the mobile carrier business law amendment initiated by Kim Seong-tae, a member of the National Assembly Science and Technology Information and Communications Commission. Especially, the bill, Park Hong-keun, banned the distribution of handsets by all three major companies, including mobile carriers and related parties, as well as manufacturers and Hi-Mart. According to the bill, not only mobile telecommunication distributors but also subsidiaries and affiliates of mobile telecommunication companies will not be able to broker or sell mobile telecommunication terminals due to `special relationship`.
It is likely to hit the major corporations including mobile phone companies and affiliated companies in this case. First, as a mobile device distributor, SK Networks sells 7 million to 8 million handsets annually, focusing on wholesale distribution of information and communication devices such as mobile phones, tablet PCs, and wearable devices. The information and communication sector accounted for 22.54% of the company`s sales. SK Networks posted a net profit of KRW 28.8 billion with sales of KRW 2.2788 trillion in the first half of this year as a terminal distribution business. The company is expected to have a big impact on earnings, as it is more likely that it will have to close its wholly-owned business, which has the third largest sales following the energy and trading divisions.
In the case of LG Electronics, even if one of the two laws passes, the handset distribution business can be blocked. LG Electronics and LG U + are LG`s affiliates. LG Electronics and Samsung Electronics will not be able to sell their handsets directly according to the law of Park Hong-keun, which prohibits the distribution of handsets from all major companies such as manufacturers and hi-marts. The industry analysis shows that the third phase is needed for the distribution of handsets, the effect of lowering the price of handsets is lowered, and consumers may suffer inconveniences.
"Full self-sufficiency is a measure to completely overturn the market," said LG U Plus CRO fair competition executive. It`s not easy to predict the market because many companies ask for it."
Kim Yeon-hak, a professor at Sogang University, stated, "We need to separate the handset and mobile service market so that the manufacturer can build the distribution network and sell the handset to the consumer at the lowest price. There is a risk of distorting the market.”
By Kim Ji Yeong kjy@
[ copyright ⓒ The Digitaltimes ]
According to industry sources on September 27, SK networks will not be able to maintain a business that supplied handsets to SK Telecom`s retail stores, given the introduction of fully self-sufficient handsets, which are currently being discussed in political circles. LG Electronics is also a related party of LG U Plus.
SK Telecom, KT, LG U Plus, and other related parties in the mobile carrier business law amendment initiated by Kim Seong-tae, a member of the National Assembly Science and Technology Information and Communications Commission. Especially, the bill, Park Hong-keun, banned the distribution of handsets by all three major companies, including mobile carriers and related parties, as well as manufacturers and Hi-Mart. According to the bill, not only mobile telecommunication distributors but also subsidiaries and affiliates of mobile telecommunication companies will not be able to broker or sell mobile telecommunication terminals due to `special relationship`.
It is likely to hit the major corporations including mobile phone companies and affiliated companies in this case. First, as a mobile device distributor, SK Networks sells 7 million to 8 million handsets annually, focusing on wholesale distribution of information and communication devices such as mobile phones, tablet PCs, and wearable devices. The information and communication sector accounted for 22.54% of the company`s sales. SK Networks posted a net profit of KRW 28.8 billion with sales of KRW 2.2788 trillion in the first half of this year as a terminal distribution business. The company is expected to have a big impact on earnings, as it is more likely that it will have to close its wholly-owned business, which has the third largest sales following the energy and trading divisions.
In the case of LG Electronics, even if one of the two laws passes, the handset distribution business can be blocked. LG Electronics and LG U + are LG`s affiliates. LG Electronics and Samsung Electronics will not be able to sell their handsets directly according to the law of Park Hong-keun, which prohibits the distribution of handsets from all major companies such as manufacturers and hi-marts. The industry analysis shows that the third phase is needed for the distribution of handsets, the effect of lowering the price of handsets is lowered, and consumers may suffer inconveniences.
"Full self-sufficiency is a measure to completely overturn the market," said LG U Plus CRO fair competition executive. It`s not easy to predict the market because many companies ask for it."
Kim Yeon-hak, a professor at Sogang University, stated, "We need to separate the handset and mobile service market so that the manufacturer can build the distribution network and sell the handset to the consumer at the lowest price. There is a risk of distorting the market.”
By Kim Ji Yeong kjy@