Korea’s mobile operators indicted for illegal subsidies - Mobile World Live

Korea’s mobile operators indicted for illegal subsidies

08 APR 2016

South Korean prosecutors have indicted the country’s three mobile operators – SK Telecom, KT and LG Uplus – on charges of violating a law banning excessive subsidies to retailers and customers.

The Seoul Central District Prosecutors’ Office said three companies paid subsidies over the limit to retail stores to attract customers when the iPhone 6 was launched in late 2014, Yonhap news agency reported.

Prosecutors said three current and former board members of the operators, who were in charge of the promotions, were also indicted.

Yonhap said it was the first time the operators have faced charges and a trial since the new law, which limits subsidies to KRW300,000 ($258), went into effect in October 2014.

Prosecutors claim that SK Telecom, KT and LG Uplus paid subsidies up to KRW460,000, KRW560,000 and KRW413,000 per device respectively.

Repeat offenders
The country’s operators have repeatedly fallen foul of subsidy regulations. Last October SK Telecom and LG Uplus were given seven-day business suspensions by the Korea Communications Commission (KCC), which restricted them from signing up new subscribers.

A year ago KCC fined the three 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 charges over excessive subsidies come just weeks after the country’s Fair Trade Commission ordered the three mobile players to pay millions of customers KRW267 billion ($230 million) in compensation for misleading them over their “unlimited” data, voice and SMS packages.

The Commission found that, between 2013 and 2015, services the three operators claimed were “unlimited” were in fact limited.

Author

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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