Korea operators penalised again for illegal subsidies - Mobile World Live

Korea operators penalised again for illegal subsidies

26 JAN 2018

The Korea Communications Commission (KCC) announced it will fine the country’s three mobile operators a combined KRW50.6 billion ($46.9 million) for illegal handset subsidies, The Korea Times reported.

SK Telecom, the country’s largest mobile operator by subscribers, was hit with a KRW21.3 billion penalty, while rivals KT and LG Uplus were ordered to pay KRW12.5 billion and KRW16.7 billion respectively.

Samsung’s sales unit, which runs about 300 shops across the country, was also fined KRW7.5 million, while a further 171 retailers which distribute mobile devices were issued a total of KRW10.9 million in fines, the newspaper said.

A controversial handset subsidy cap was discontinued at end-September 2017 after being in effect for three years. The cap of KRW330,000 on the cost of new handsets was introduced as a part of the country’s new Telecom Act, which was designed to promote fairer competition among mobile operators and to encourage handset makers to lower prices.

The regulator said the companies were fined for offering subsidies higher than the limit for new handsets between January and August 2017, which was before the limit was lifted.

Play fair
KCC chairman Lee hyo-sung said: “We hope the corrective measures help the telecom firms to shift their focus from wasteful marketing competition to improving service quality,” The Korea Times reported.

In early September 2017 Lee met with the CEOs of KT, SKT and LG Uplus and asked them to play fair and refrain from engaging in cut-throat competition after the cap was scrapped.

The three operators were fined multiple times between 2014 and 2016 by the KCC for flouting the regulation.

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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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