The Korea Herald


Mobile carriers slapped with fines and suspension penalties

KCC fines telecoms for giving huge customer discounts

By 김정보

Published : July 18, 2013 - 14:24

    • Link copied

A customer walks past a shop selling mobile phones in Seoul on Thursday. (Yonhap News) A customer walks past a shop selling mobile phones in Seoul on Thursday. (Yonhap News)

The Korea Communications Commission said Thursday it would slap fines and suspension penalties on the nation’s three telecoms for having offered undue subsidies to attract customers.

“The KCC decided to penalize the three mobile carriers ― SK Telecom, KT Corp. and LG Uplus ― for granting financial subsidies to the customers exceeding 270,000 won ($240), the maximum allowed by the law,” said the regulator in a press release.

The three telecoms gave out illegal subsidies for up to 72 percent of the subscriptions received between Jan. 8 and March 13 despite being banned in that time from signing up new customers due to business suspension orders.

During that period, KT, the second-largest carrier, gave out subsidies worth 436,000 won on average, followed by SK with 420,000 won and LG Uplus with 381,000 won, according to the state regulator.

From April 22 to May 7, when market competition reached a peak, half of the subscribers were found to have received illegal financial subsidies from the firms.

The state telecom regulator said SK Telecom would be ordered to pay up to 36.4 billion won, along with KT and LG Uplus with fines of 20 billion won and 10 billion won, respectively.

The regulator also decided to impose a seven-day suspension of business operations on KT, which is considered to have played a leading role in stoking competition with illegal financial grants.

The decision came after the three major players of the mobile market were fined 5.3 billion won in March.

In January, the KCC fined the three telecoms a total of about 12 billion won, adding to business suspensions that ran Jan. 9-March 13.

By Kim Young-won