KCC again fines 3 mobile players over subsidies

Korean regulator KCC again fines 3 mobile players over subsidies

16 MAR 2015

The Korean Communications Commission (KCC) has once again fined the country’s three mobile operators for offering illegal handset discounts.

The regulator imposed fines of KRW1.59 billion ($1.42 million) on LG Uplus, KRW930 million on SK Telecom and KRW870 million on KT, the JoongAng Daily reported.

LG Uplus was given the highest fine for continuing to offer the illegal deals, which it started in October, even after its two competitors suspended theirs.

The country’s three major operators were each fined KRW800 million ($717,000) last November for not reducing their subsidy levels to comply with a new regulation — the Mobile Device Distribution Improvement Act which went into effect on 1 October — that sets the subsidy ceiling at KRW300,000 ($280).

In the most recent case, LG Uplus offered discounts to buyers who returned an old phone in good condition. It told customers they would get the discount when purchasing a new phone on the promise that they turn in the device 18 months later.

KCC chairman Choi Sung-joon said the handset compensation fee goes against the new regulation because it has been offered only to customers on certain monthly plans (high-end monthly plans) and “there were no standards for the customers to follow later when returning the used phones”, the Daily reported.

“If the problems are solved, offering the used-phone compensation fee in advance will not be illegal anymore,” Choi added.

All three carriers required customers to pay back the discounted amount in a lump sum if they moved to another carrier within 18 months, the Daily said.

The KCC said about 185,000 SK Telecom customers purchased new phones using such discounts as of early March, while about 168,600 KT and 206,000 LG customers did so.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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