KT calls for ban on handset subsidies
By Kim Yoo-chul
A senior KT executive is making strong appeals to the government to stop smartphone manufacturers from offering subsidies in an attempt to bring the local telecom market back on track.
In a luncheon meeting with local reporters, Thursday, KT President Pyo Hyun-myung stressed that it was time to root out the practice of providing illegal subsidies for handsets.
''Confusion and distrust about handset prices are resulting from different prices and contract periods at stores,’’ Pyo said.
''Without illegal subsides, consumers could purchase handsets at reasonable prices. If the new pricing system is implemented, then the market will return to normal,’’ the KT executive said.
KT is the first local telecommunication firm among the top three to push a ''fair price system.”
''Manufacturers should cut their suggested retail prices and overhaul two-way registration systems ― retail prices with contracts or retail prices without contracts ― to solve the confusion and distrust,’’ the executive said.
The remarks come as the Korea Communications Commission (KCC) is considering imposing extra penalties on leading local telecom firm SK Telecom for continuing to offer high handset subsidies despite prior warnings.
The government agency previously ordered SK Telecom, KT and LG Uplus to stop attracting new customers for offering illegal handset subsidies.
SK Telecom will be banned from signing new customers for 22 days between January 31, 2013 and February 21, 2013, while KT is facing similar restrictions from February 22, 2013 to March 31, 2013. LG Uplus is the first to serve its ban, spanning 24 days and ending on January 30.
All three telecoms were also fined a total of 11.89 billion won ($11.2 million).
The KT president clarified the company’s stance that is against the government’s ongoing moves to scrap registration fees from new customers as that measure, if realized, will see local telecom firms delay their investment in networks.
''We are against the government’s plan to scrap registration fees. The fees are the right material for telecom firms to re-invest for advanced networks,’’ he said.
Meanwhile, Pyo said that the nation’s second-biggest mobile carrier is still waiting for confirmation from LG Electronics on the launch of its latest smartphone ― the Nexus 4.