Korea may mandate reporting of subsidies

Dylan Bushell-Embling
06 Aug 2014

In its latest attempt to crack down on the practice of operators offering excessive handset subsidies, South Korean regulator KCC is considering new rules requiring telcos to detail the incentives they offer.

The body will decide by October whether to introduce a requirement for both operators and handset makers to report detailed information about the discounts and other incentives offered to consumers, the Korea Times reported.

Any new rule would focus on serving the interests of consumers, KCC chief Choi Sung-joon told local media.

It would seek to ensure fair competition, so that larger operators are not able to use their superior financial clout to gain an unfair advantage over smaller rivals.

Industry representatives the Times spoke to were divided over the prospect of the mandatory reporting rule. Some thought consumers had a right to know, while others believe that the flood of information will only confuse consumers.

Last month, the KCC announced plans to introduce other changes to the rules surrounding handset subsidies. The regulator said it will alter the subsidy cap – previously set at 270,000 won ($263) per device – every six months based on market factors. The new cap will range from 250,000 won to 350,000 won.

In addition, the KCC said that in the name of fairness, it will mandate the offering of subsidies even for subscribers who wish to hold on to their existing smartphones.

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