KCC may suspend LG U+ again over subsidies

Dylan Bushell-Embling
07 Nov 2013

The topic of “illegal” handset subsidies is back on the agenda in South Korea, with regulator KCC reportedly considering punishing operators for exceeding the subsidy cap.

The KCC is likely to impose a fresh two-week ban on signing up new mobile customers on LG U+ as a punishment for violating communications laws, sources within the agency told the Korea Times.

Officials will also soon decide whether to impose penalties including fines on all three mobile operators, the source added. But LG U+ is accused of breaching subsidies five times since the most recent subsidy probe, compared to three times for KT and twice for SK Telecom.

LG U+'s penalties are thus likely to be stricter, and the source said the agency is also considering fining the operator as much as 170 billion won ($160.3 million) for the alleged violations.

In January, the KCC suspended all three operators from signing up new mobile customers for between 20 and 24 days - and fined them a combined 11.89 billion won - as a penalty for exceeding the 270,000 won limit on handset subsidies.

Significantly, Korean operators' latest quarterly results show that third-ranked LG U+ is catching up to second-place KT in terms of market share and profitability, with KT losing customers and LG U+ aggressively pushing for new subscribers to its LTE network.

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