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Mobile & Wireless

Korean mobile firms fined, to face sales ban

Thursday 27 December 2012 | 09:31 CET | News
Korea Communications Commission (KCC) has imposed business suspensions on SK Telecom, KT and LG Uplus and fined them for providing discriminative subsidies to lure customers, reports the Yonhap News Agency. The country’s three mobile carriers will be banned from attracting new customers for up to 24 days starting in January 2013, and have been fined a combined KRW 11.89 billion, said the regulator. LG Uplus will be barred from gathering new subscribers for 24 days from 07 January 2013, while SK Telecom and KT will also be banned from luring new customers for 22 days and 20 days, respectively, according to the KCC. SK Telecom was fined KRW 6.89 billion, with KT and LG Uplus slapped with KRW 2.85 billion and KRW 2.15 billion in fines.

The regulatory move comes after the KCC started a probe in September after finding that the three mobile operators had discriminated against subscribers by paying subsidies of over KRW 270,000 to certain users between July and December this year. Of the discriminative cases, LG Uplus was found to have most frequently offered subsidies, followed by SK Telecom and KT, according to the watchdog. The KCC said the three companies should submit a plan within a month on how to correct their system and later submit an additional report on how they executed the plans.

However, the mobile carriers voiced concern over the ban. LG Uplus said that the longest suspension was imposed on it and urged the government to stabilise the market. SK Telecom said in a statement that it was a "harsh decision" to simultaneously impose bans and fines. The company said the incident should lead to heightened punishment as well as initiate a probe into finding out which company triggered this overheated competition. KT was not immediately available for comment. Meanwhile, some market watchers projected the regulatory move will boost earnings for the three companies.

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Categories: Mobile & Wireless
Companies: Korea Communications Commission / KT / LG Uplus / SK Telecom
Countries: Korea, Republic of
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