SK Telecom faces additional fines over subsidies

SK Telecom faces additional fines over subsidies

23 MAR 2015

South Korea’s telecoms regulator said it will fine market leader SK Telecom (SKT) for providing illegal discounts to attract customers and clear handset inventories ahead of the launch of Samsung’s new flagship, Galaxy S6.

The Korea Communications Commission (KCC) investigated SKT for allegedly offering more than KRW400,000 ($354) in subsidies for several new models through its retail stores in January. The regulator will meet on Thursday to determine the amount of the fine and is also expected to also discuss raising the subsidy level, which at its current level has slowed market growth, the Korea Times reported.

The regulator has the option of imposing a business suspension on SKT. Last April in imposed a 45-day suspension on SKT ahead of the launch of Samsung’s Galaxy S5, the paper said.

Just over a week ago the KCC again fined the country’s three mobile operators for offering illegal handset discounts. It imposed fines of KRW1.59 billion ($1.42 million) on LG Uplus, KRW930 million on SK Telecom and KRW870 million on KT. 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 also 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.

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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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