After ten years of regulation, South Korea's stringent device subsidy law, known as the 단통법, has been officially repealed by the National Assembly. Approved on December 26, 2024, with 161 votes for and 94 against, the dissolution of the law aims to promote fairness among consumers concerning device subsidies. This law was originally instituted to prevent telecommunications companies from granting excessive subsidies to select consumers, which created disparity and frustration among users.
Since its implementation, 단통법 faced growing criticism as it tightened the regulations surrounding device subsidies. Over the past years, consumers reported experiencing reduced subsidies, which contradicted its intention to create equity among users. Consequently, the conversation shifted toward revamping the competition among service providers to improve consumer welfare.
Alongside the repeal, adjustments have been made within the Telecommunications Business Act, which now governs the choice discount system, previously overseen by the 단통법. These reforms are expected to stimulate competition between telecommunications companies, potentially leading to lower device prices as providers compete more freely.
The Minister of Science and ICT, 유상임, underscored the necessity for the repeal, highlighting plans to mitigate negative impacts associated with the law's abolition. "We aim to encourage competitive subsidy schemes among providers, which should help alleviate the financial burdens placed on consumers when purchasing devices. We will also introduce measures to address any adverse effects arising from the law's repeal," 유 said.
Stakeholders express optimism about the renewed competitive environment. 김태규, the interim chairman of the Korea Communications Commission, suggested the likely positive impact on consumers' financial burdens from lowered costs resulting from enhanced competition. The expectation is strong for subsidies on newly acquired devices and the resumption of competitive pricing showcased by telecommunications providers.
Despite the positivity surrounding the repeal, concerns linger about potential market chaos and how competition will play out among already saturated players. Observers remain cautious about the telecommunications companies unleashing significant funding for subsidies in their quest for customers as they shift their focus toward new projects and technologies, such as AI.
The legislative session on this day saw not only the repeal of the 단통법 but also the passing of the AI Fundamental Law, intended to stimulate growth within the country's AI sector. With this, the assembly affirmed its commitment to integrate AI regulation and development alongside telecommunications reforms.
The AI Fundamental Law received overwhelming support within the assembly, highlighting its intent to lay the groundwork for establishing the Republic of Korea as a global leader in AI technology. The law mandates the construction of frameworks related to AI ethics, safety, and economic growth, indicating the government's recognition of the importance of this burgeoning field.
Unpacking both the repeal of the 단통법 and the introduction of its AI counterpart offers insight not only on immediate consumer benefits but also reflects broader ambitions for the country's technological future. With these policies, South Korea appears set to navigate through significant market transformations, bringing with it both challenges and promising opportunities.
