Regulator to punish mobile carriers

By Kim Yoo-chul

The Korea Communications Commission (KCC), the nation’s top telecom regulator, said Tuesday that it will impose additional penalties on three local carriers for continuing to offer high handset subsidies during the business suspension period.

“We will hold a meeting to decide disciplinary measures on July 18. It is highly likely that all three carriers will be banned from recruiting new customers for certain periods from the end of July,” said a KCC spokesman.

The official said the agency is still analyzing the data over the trend of handset subsidies offered by the carriers ahead of the final decision.

“But this time we will single out one company that has led unfair competition and impose heavier penalties,” said the spokesman.

The carriers were earlier suspended by the agency and they were fined a total of 11.89 billion won. Despite the penalties, the KCC found that the three carriers are still violating the rule by continuing the practice of offering illegal amounts of handset subsidies.

In its previous investigations, SK had the highest violation rate, which measures the proportion of excessive subsidies for new customers.

“A company with the highest violation rate will get extra penalties, which will deal a blow to it as that carrier will lose the daily average of its clients between 10,000 and 45,000 to rivals,” said the spokesman.

But it’s unknown whether SK Telecom will receive an extra business suspension, again. Officials at the carriers declined to comment citing the sensitivity of the issue.

“The timing is so bad as the demand for devices using the faster LTE networks called LTE-Advanced (A) will rise during the summer season. Any business suspension will hurt the bottom line in profit,” said a salesclerk at one of SK’s authorized outlets located in Gangnam subway station in a brief street interview.

SK Telecom is in talks with Apple about bringing LTE-A network to future iPhones, tentatively called the iPhone 5S to overtake KT and LG Uplus in the race for LTE-A devices.