An interesting conundrum brewed in South Korea recently. According to reports, South Korean carriers, SK Telecom, KT corp, and LG UPlus were banned by the South Korean government from signing up customers or replacing phones between April 5 to May 19. The reason for this ban was a judicial punishment because the carriers had broken several regulations regarding subsidizing handsets by more than 270,000 won ($250).
Because of this, several of these carriers were worried their sales would be hit hard for the upcoming Samsung Galaxy S5 launch. One of the carriers, SK Telecom was trying to work out a deal with Samsung in which they could launch the Galaxy S5 early, in order to mitigate some of the impending sales ban. Unfortunately, no agreement was reached between the carrier and Samsung, and the global tech titan basically insisted that SK Telecom stick with the April 11th launch date.
In a comical turn of events, SK Telecom basically thumbed their noses at Samsung and started selling the Galaxy S5 early anyway, since they already had pre-order and launch day inventory stocked up. Here are some comments quoted below from both companies.
A Samsung spokesperson said in an emailed statement,
While a SK Telecom responded with,
It remains to be seen how Samsung will react to SK Telecom's brazen behavior. In the short term you can understand why the company chose to do this. They were worried they would be hit very hard by the timing of the temporary sales ban. However, you have to wonder if their executives weren't thinking long-term. Samsung is one of the most powerful global OEMs on the planet. It's not a good idea to bite the hand that feeds you, because it can make things miserable for you down the road.
It will be interesting to see what Samsung does as punishment (if anything) to SK Telecom.
Source: Bloomberg
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