Seoul to require price tags on all mobile phones

South Korea plans to require all mobile phone vendors to put price tags on their products in an effort to inform buyers of the exact fair price, the government said Thursday.

Under a new government decree, the open price system will take effect from the beginning of next year and even cover home shopping channels that occasionally sell cellular phones, the Ministry of Knowledge Economy said.

Currently, sellers only need to mark their own prices, creating large discrepancies in price for the same phone between different sellers, as well as confusion for consumers.

“Such a large price difference is created for the same phone between different sellers because of the complex and ambiguous price information they offer,” the ministry said in a press release.

For example, many shops currently advertise certain models as being free when, in fact, the customers end up paying the entire cost of the phone in monthly installments along with their service fees.

Under the new price system, sellers will be required to display the actual amount of money people have to spend, even in monthly payments, on new phones, in addition to the original price of the phones.

They will also be required to specify the exact discount under each different monthly service fee program rather than simply saying the phones are free. In many cases, a phone is only really free when a customer subscribes to the most expensive service fee program.

“The government believes the new price-tag system will help lower prices by revealing to consumers the actual prices for phones, separate from the rates of monthly fee programs, and thus encouraging price competition between sellers,” the ministry said.

A recent survey on 10,000 people showed the average amount of money spent on the purchase of a new phone was 369,000 won ($325) while the highest amount came to 642,000 won, according to the ministry. 

(Yonhap News)