South Korea’s operators banned from signing new customers - reports

South Korea’s operators slapped with device sales ban – reports

10 MAR 2014

As a punishment for what it sees as excessive handset subsidies, South Korea’s communications regulator slapped a 45-day ban on each of the country’s three mobile network operators from selling devices – either to new customers or existing ones.

According to Reuters, operators in South Korea’s hyper-competitive mobile market had broken regulations by subsidising handsets by more than KRW270,000 ($250).

For SK Telecom, the country’s largest mobile operator, the ban stretches from 5 April to 19 May, according to local media reports

The device-selling ban on second-placed KT kicks in on 13 March and lasts until 26 April.

Third-placed LG Uplus has its ban split into two periods: from 13 March to 4 April, and then from 27 April to 18 May.

The regulator reportedly decided to suspend two operators simultaneously because when it previously dished out suspensions separately (for the same offence), the other two competed even harder.

Analysts have speculated how far the ban in South Korea might affect sales of Samsung’s S5, which is expected to go on sale globally from 11 April.

“The Korean market accounts for a relatively small portion of Samsung’s overall smartphone sales, but given that they need to maximise sales in the first three months of the launch, the operation suspension of mobile carriers could hit initial S5 sales,” said IM Investment & Securities analyst Lee Min-hee, quoted by Reuters.

Lee added that the ban, as well as a lack of eye-catching hardware improvements, may see S5 sales in the first three months fall short of the 20 million S4s sold within three months of launch.

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Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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