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South Korea allows 3G handset subsidies

40 per cent off W-CDMA

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Mobile Operators in South Korea will be allowed to offer big discounts on handsets for the first time.

South Korea has led the field in next generation mobile services despite the ban on handset subsidies, which were prohibited in 2000.

Operators will now be allowed to cut 25 per cent off the price of PDA phones and 40 per cent off the price of W-CDMA, according to the Korea Herald. PDA phones must have a screen larger than 2.7 inches to qualify for the cuts.

Korean tech-obsessed consumers are likely to go for PDA devices - some of which will now be cheaper than phones, the paper predicts. IDC Korea forecasts the price cuts could increase sales by as much as 60 per cent.

Two operators, KTF and SK Telecom, have signed up only 1,100 subscribers to the W-CDMA service since launch in December, compared with 5 million subscribers to CDMA200 EV-DO service. WCDMA handsets cost roughly 1m won ($870) more than EV-DO handsets.

South Korea's largest mobile operator, SK Telecom has not welcomed the news, so consumers may have to wait to feel the benefit of the change. ®

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