SKT, KT in tit-for-tat over subsidies

By Kim Yoo-chul

SK Telecom accused KT of offering illegal subsidies to steal customers from other mobile carriers, Thursday.

“Since Jan. 21, KT has been providing huge rebates to its retail stores to lure more customers in a breach of the Telecom Law. We strongly urge KT to immediately stop this as this hurts fair market competition,” SK said in a statement.

It said a local KT outlet provided up to 550,000 won for each customer who wanted to change their mobile carrier.

“Rather than using authorized channels, KT is using social network services and online networks to bring in new customers,” said the statement.

SK said it has asked the Korea Communications Commission (KCC), the country's top telecom regulator, to investigate the alleged illegal subsidies, and to impose penalties.

“KT is losing its customers as it has fewer flagship models supplied by major handset manufacturers such as Samsung for promotional campaigns. This isn't fair,” said an SK official.

The SK response comes a day after the regulator began probing an alleged heavy rebate case involving it after KT submitted documents claiming that it was using illegal marketing.

KT dismissed the claims by SK.

"This is groundless. As SK Telecom is being probed, it blames others," said an official.

KT recently filed a court injunction to stop SK ads that claim it is offering the world's first commercialization of a tri-band LTE-A wireless network. KT is seeking a complete ban on the ads claiming that SK is misleading the public with "false" press releases and that the tri-band LTE-A service is not currently available.

New laws were enacted by the regulator last year in order to ease the cutthroat rivalry in the country’s telecom services sector.

Known as the Handset Distribution Act, the regulations prohibits telecommunications companies from using aggressive marketing tactics, such as heavily subsidized handsets and data plans, to lure customers from rivals.

The current subsidy ceiling is set at 300,000 won.