Korea’s top 3 mobile carriers slapped with record fine for illegal 5G subsidies

Subsidized 5G smartphones will be difficult to come by in South Korea after all big three wireless carriers were slapped with hefty fines for promotional grants after a yearlong overlooking by authorities on outlawed subsidy practices in the first year of 5G launch.

The Korea Communications Commission (KCC) has imposed the country’s three major mobile carriers – SK Telecom Co., KT Corp., and LG Uplus Corp. – a record fine of 51.2 billion won ($43 million) for offering illegal subsidies to their 5G network service subscribers.

SK Telecom is slapped with the heaviest fine of 22.3 billion won, followed by KT with 15.4 billion won and LG Uplus 13.5 billion won, according to the telecommunication regulator on Wednesday.

The fines are the largest ever since the country’s Mobile Distribution Improvement Act went into effect in October 2014. The law was implemented to prevent mobile carriers and retailers from giving out excessive discounts and rebates on mobile phone purchases to attract customers.

The KCC also has fined a total of 272.4 million won on 125 local mobile retailers that gave out discriminative subsidies or neglected pre-sales screening procedures.

The penalties were decided based on the KCC’s probe into illegal subsidies paid out from April to August last year. The 5G services were launched in Korea in April last year.

The final penalty amount is a 45 percent cut from KCC’s initial decision. The regulator reduced the fines after taking into consideration the pledges made by the mobile carries and economic uncertainties from the COVID-19 crisis.

The three mobile carriers have promised to provide 710 billion won worth financial support for 5G network infrastructure investment and retailers.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]