The Korea Times close
National
  • Politics
  • Diplomacy
  • Defense
  • Labor & Environment
  • Law & Crime
  • Health & Welfare
  • Embassy
  • Seoul & Provinces
  • Education
  • Foreign Communities
  • Obituaries
  • Multicultural Youth Award
Biz & Tech
  • Auto
  • IT
  • Game
  • Manufacturing
  • Retail & Food
  • Energy
  • Construction
  • Airlines
Finance
  • Policies
  • Economy
  • Markets
  • Banks
  • Non-banks
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
Lifestyle
  • Arts
  • Books
  • Travel & Cuisine
  • Trend
  • Fashion
  • Around Town
  • Fortune Telling
  • Translation Award
Entertainment
  • K-pop
  • K-dramas & Shows
  • Movies
  • Music
  • Performances
  • Asia Model Festival
Sports
  • Football
  • Golf
  • Baseball
  • Other Sports
World
  • Asia Pacific
  • Americas
  • Europe & Africa
  • SCMP
Video
  • On the Spot
  • Feature
  • News
Photos
  • Photo News
  • Darkroom
Community
  • The Korea Times
  • all menu
  • search
  • facebookfacebook
  • twittertwitter
  • youtubeyoutube
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
  • The Korea Times
  • all menu
  • search
  • facebookfacebook
  • twittertwitter
  • youtubeyoutube
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
Biz & Tech
  • Auto
  • IT
  • Game
  • Manufacturing
  • Retail & Food
  • Energy
  • Construction
  • Airlines
Sun, December 15, 2019 | 21:55
IT
More penalties on carriers mulled
Posted : 2013-01-31 17:12
Updated : 2013-01-31 17:12
Mail
Print Preview
Font Size Up
Font Size Down
Pedestrians pass by an unidentified phone outlet near Oksu Station, downtown Seoul, Thursday. The local telecom regulator plans to impose additional penalties on all three mobile carriers as they continue to offer heavy illegal handset subsidies despite previous punishments.
Pedestrians pass by an unidentified phone outlet near Oksu Station, downtown Seoul, Thursday. The local telecom regulator plans to impose additional penalties on all three mobile carriers as they continue to offer heavy illegal handset subsidies despite previous punishments.

By Kim Yoo-chul

The Korea Communications Commissions (KCC) confirmed Thursday it will impose additional punishments on the country's three mobile phone operators for continuing to provide higher-than-legal handset subsidies despite being hit by suspensions for previous violations.

''Despite previous warnings, the carriers are continuing to break the law with subsidies. There will be more penalties after we complete the investigation,'' said a senior KCC official, who hinted at more business suspensions.

SK Telecom, KT and LG Uplus were given suspensions late last year for providing customers with excessive subsidies to help them purchase pricey smartphones and tablets.

SK Telecom, the largest carrier with a 50 percent-plus market share, entered a 22-day period on Thursday during which it will be prevented from signing up new customers. LG Uplus, the smallest of the three, was served a 24-day ban that ended Wednesday. KT, the country's second-largest wireless carrier, will face the same restrictions from Feb. 22 to March 31.

The carriers were also fined a combined 11.89 billion won. The KCC has imposed strict limits on the level of handset subsidies to prevent the market from overheating and maintain parity in competition.

The unruliness of wireless carriers is one reason why the KCC continues to foster the market for mobile virtual network operators (MVNOs), which rent data and voice minutes from existing carriers to sell as their own wireless services.

While the KCC believes MVNOs will benefit customers by triggering price competition in the telecommunications industry, the presence of virtual operators has been close to non-existent here as carriers are reluctant to lease their networks cheaply.

KT spokeswoman Kim Yoon-jeong declined to comment on whether the company has continued to provide excessive handset subsidies or whether it anticipates further penalties. Representatives from SK Telecom and LG Uplus were equally coy.

Out of control?

Market watchers question whether the KCC has lost the respect of the carriers, which they expect will continue to splurge on marketing expenses in a cut-throat competition.

''Because long-term evolution (LTE) is a growing market, each carrier is spending more to get an early lead. In this environment, the government's cap of 270,000 won per handset doesn't make any sense, especially when phones today are more like handheld computers,'' said a KT executive who didn't want to be named.

An LG Uplus official agreed.

''Customers don't trust the price tags on smartphones out of the factory. No one will pay for a phone's face value. We provide subsidies because customers want them. What is wrong with that?'' he said.

The LG Uplus spokesman said that his company has no choice but to continue providing higher-than-legal subsidies because it anticipates its rivals will do so too.

''Success in LTE is a life-and-death matter for us in a saturating voice market. We have no choice,'' he said.

SK Telecom appears to have found a loophole in the KCC suspension. Sales people from the carrier admitted that the firm was still receiving pre-orders for new phones through the number portability policy, which allows customers to switch carriers without changing numbers.

''As you know, we can't attract new customers for the next few weeks. But if you sign up to use us as the carrier via pre-order proceedings, then we will give you more discounts,'' said an SK Telecom salesclerk near Gangnam Station in southern Seoul.

KT has been selling Samsung Electronics' latest Galaxy GRAND smartphone for between 50,000 won and 150,000 won with the condition of changing carrier and agreeing to pay 62,000 won for a monthly plan.

The suggested retail price of the GRAND was 726,000 won, the phone manufacturer Samsung Electronics said.

In investigations conducted between Dec. 25, 2012, and Jan. 8, 2013, SK Telecom had the highest violation rate, which measured the proportion of excessive subsidies for new customers, the KCC showed.

The carriers released unlimited data services for customers signing up for new pricing packages supporting their own LTE services, raising the possibility that the effects of the agency's additional punishments will be short-lived.


Emailyckim@koreatimes.co.kr Article ListMore articles by this reporter








 
 
  • numberA grain of salt: How China tarnished Korea's 'white gold'
  • numberLG honorary chairman dies at age 94
  • number[VIEW] Pyongyang trapped in illusion of 'North Korean superiority'
  • numberPyeongChang invites tourists to trout and snow festivals
  • numberUS to be 'tested soon' on nuclear talks with North Korea
  • numberPlan to extend visa waiver entries raises immigration worries
  • numberJapan suffers more damage amid protracted Seoul-Tokyo trade war
  • numberNo 2023 World Cup bid but Hwang close to big stage
  • numberN. Korea conducts 'another crucial test'
  • numberMultiple pileups on highway kill at least 5, injure over two dozens
  • Male rapper convicted of sexually insulting female singer in lyrics Male rapper convicted of sexually insulting female singer in lyrics
  • Actor Lee Byung-hun confident with his new film 'The Man Standing Next' Actor Lee Byung-hun confident with his new film 'The Man Standing Next'
  • Cosmic Girls' Dawon takes forced rest over mental distress Cosmic Girls' Dawon takes forced rest over mental distress
  • Actor Park Jung-min talks about his real personality Actor Park Jung-min talks about his real personality
  • 'Hurrah for Women 2' unfolds touching family drama 'Hurrah for Women 2' unfolds touching family drama
DARKROOM
  • Children deserve better

    Children deserve better

  • Global climate change: time is running out

    Global climate change: time is running out

  • CA cave fire burns more than 4,300 acres

    CA cave fire burns more than 4,300 acres

  • No money, no hope: South Korea's 'Dirt Spoons'

    No money, no hope: South Korea's 'Dirt Spoons'

  • Hong Kong democrats score historic victory

    Hong Kong democrats score historic victory

  • About Korea Times
  • CEO Message
  • Times History
  • Content Sales
  • Media Kit
  • Contact Us
  • Location
  • Privacy Statement
  • Terms of Service
  • Mobile Service
  • RSS Service
  • Ombudsman
  • hankookilbo
  • Dongwha Group
  • Code of Ethics
Copyright