South Korean operators punished for breaking subsidy laws again

South Korean operators punished for breaking subsidy laws again

22 AUG 2014

South Korean operators have been fined and given sales bans for once again breaking government rules around handset subsidies.

According to the country’s Yonhap, an investigation by the Korea Communications Commission (KCC) between 26 May and 13 June fund that the average subsidy offered by SK Telecom, KT Corp and LG Uplus was KRW616,000 (€454). The limit imposed was KRW270,000.

The KCC has imposed a total of KRW58.41 billion ($57.15 million) in fines, with SK Telecom required to pay the largest fine of KRW37.1 billion, with KT Corp fined KRW10.76 billion and LG Uplus KRW10.55 billion.

SK Telecom and LG Uplus have also been hit with a sales ban of one week, as another KCC investigation found they broke the subsidy rules earlier in the year.

LG Uplus will not be able to sign up new customers between 27 August and 2 September, with SK Telecom affected between 11 September and 17 September.

In March, all three South Korean operators were given a 45 day ban on selling devices to new or existing customers after being found to have breached subsidy rules.

The South Korean government passed the Mobile Device Distribution Act in May, which is aimed at limiting subsidies regardless of when and where devices are sold, and imposing tougher sanctions for when the rules are broken.

As explained by Korea JoogAng Daily, the law comes into effect in October, with any store discounts limited to 15 per cent of a base subsidy set by the KCC.

Operators found to have broken the law could be in line for fines of up to 3 per cent of their annual sales. Individual stores could also be fined up to KRW50 million while operator executives could be fined up to KRW150 million, or even face prison.

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Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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