KCC issues further sign-up bans, levies financial penalties for subsidy

13 Mar 2014

Hot on the heels of the announcement of 45-day business suspensions for all three of South Korea’s mobile network operators – KT Corp, SK Telecom (SKT) and LG Uplus – it is understood that the Korea Communications Commission (KCC) will penalise the latter two further. According to Yonhap News Agency, the regulator has ordered two additional suspensions from signing up new subscribers for market leader SKT and LG Uplus for seven and 14 days, respectively. In addition, the KCC has imposed fines on all three of the operators in response to their continued defiance of rules which bar subsidies. To that end, SKT has been directed to pay a fine of KRW16.6 billion (USD15.6 million), while KT and LG Uplus will pay KRW5.5 billion and KRW8.2 billion, respectively.

The penalties imposed by the KCC add to punitive steps taken by the Ministry of Science, ICT and Future Planning (MSIP); as previously reported by CommsUpdate, earlier this week the ministry revealed that each operator would be barred from signing up new subscribers for 45 days. Such action followed numerous warnings from the authorities for operators to halt subsidies. Notably, unlike previous bans, the MSIP also confirmed that, rather than suspending one carrier at a time, it would impose the block on sign-ups on two firms simultaneously. It said it had decided to carry out the bans in this fashion following claims that previous experiences showed that the market became overheated when just one operator was punished.

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