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SKT reports its rivals to state telecom regulator over subsidy

SK Telecom, the country’s largest mobile carrier, said it submitted a request to the state telecom regulator, asking it to punish its competitors over wrongful plays such as massive subsidy offering.

The company claims its two rivals KT Corp. and LG Uplus have impeded competition by providing subsidies that amount to over 700,000 won over the past two months.

“Recently, KT and LG Uplus have been operating a rebate policy leveling up to 700,000 won, which is a record in telecom marketing and also offering prizes like gift certificates and laptop PCs,” said company officials.

As a result, the number of SKT subscribers has shrunk by 23,809 from May to June 14, whereas subscribers at KT and LG Uplus went up 6,077 and 17,732, respectively, SKT officials said.

“Providing excessive subsidies may impact other subscribers by having them pay more and weaken their ability to cut down telecom fees or make investments in the long term,” its officials said.

An SKT spokeswoman added that the company was spending only half of the subsidies of its competitors on average. The government has set the limit to subsidies at 270,000 won.

In response, KT said the country’s top mobile carrier’s move was possibly its way to press its rivals to respond to the government’s request to lower telecom costs.

Being the No. 1 industrial player, SKT announced earlier this month that it will deduct 1,000 won from its basic service fees and give 50 free text messages every month, following pressure from the government and political circles.

KT Corp. and LG Uplus have not yet laid out a responding fee cut plan.

LG Uplus, on the other hand, said it seems as if SKT put in the request as part of its efforts to not lose ground in the market as its supply of smartphones was unstable lately.

“We will also seriously consider obtaining evidence that SKT was also part of irregularities to make the request to the Korea Communications Commission,” said LG Uplus officials.

By Cho Ji-hyun (sharon@heraldcorp.com)
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