SK government may up ante on subsidies

Dylan Bushell-Embling
07 Mar 2014

South Korea's telecom minister has threatened to turn up the pressure on the nation's mobile operators for their continued practice of offering subsidies for new customers.

YonHap news quotes minister Choi Mun-kee as stating that the government will do “whatever it can” to stop operators from offering subsidies in order to poach customers from each others' networks.

The government will punish SK Telecom, KT and LG U+ if they do not stop the practice, he said. Operators should instead be seeking to improve their technology and expand into new markets to counter stagnating growth in South Korea's mobile market, he said.

South Korean officials have long taken the view that excessive subsidies undermine fair competition and distort the market.

In January last year, regulator KCC suspended all three operators from signing up new customers for their practice of offering handset subsidies that exceed the regulated limits.

Operators have since come under scrutiny multiple times for allegedly exceeding the cap again.

As the nation's mobile market becomes increasingly saturated, the subsidy issue is likely to take on increasing importance.

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