Mobile firms get back to business

By Kim Young-won

Carriers to restart fierce competition following suspensions

  • Published : May 15, 2014 - 20:46
  • Updated : May 15, 2014 - 20:46
Korea’s three mobile carriers are set to face off in a fierce race to attract and secure customers as SK Telecom and LG Uplus resume operations next week after business suspensions for doling out excessive subsidies.

KT, the No. 2 player, has been the only one operating since April 27, and has successfully attracted subscribers away from its competitors.

The company saw some 194,000 customers, or around 11,000 a day, switch to its services during the 17 days since it restarted its operations.

This has undermined the leadership of SK Telecom, the market share of which is about to fall below 50 percent for the first time in years.
A KT dealer serves customers at the mobile carrier’s retail shop in Seoul. (KT)

Many market watchers are bracing for the possibility of another subsidy war between the three giants, with the regulator remaining alert.

LG Uplus attracted some 8,500 customers a day from its competitors between April 5 and 26, and SK Telecom snagged 6,300 a day between March 13 and April 4.

“If KT and LG Uplus are able to snatch up subscribers from their rivals at this pace, it is only a matter of time before SK’s market share drops below 50 percent,” a market observer said.

Analysts had positive outlooks for KT as LG Uplus and SK Telecom are scheduled to be issued additional 14-day and seven-day business bans, respectively, by the Korea Communications Commission.

The KCC is expected to soon finalize its decision on the penalty timeline for the two telecom companies.

SK Telecom and LG Uplus, meanwhile, have argued that KT recently lured customers by “handing out illegal subsidies to customers.”

KT denied their claims, saying that it is currently considering filing lawsuits against the two mobile carriers.

The KCC had a meeting with top marketing executives from the three companies Thursday on concerns over a possible revival of the subsidy war.

Yoon Jong-rok, vice minister of Science, ICT and Future Planning, also plans to meet with telecom executives to ask for their cooperation in stabilizing the market.

By Kim Young-won (