KT vows to appeal record penalty

KT, Korea’s largest fixed-line phone service provider, said yesterday it will appeal a record penalty of 116 billion won ($116 million) levied Wednesday by the Fair Trade Commission for price-fixing local phone rates between 2002 and 2004. The Information Ministry sided with the communications giant, saying it regretted the commission’s decision. In a statement, KT denied a price-fixing conspiracy. “We occupied 95 percent of the local phone market at the time, and Hanaro had lowered its rates even below the break-even line in order to attract customers. At the time, the Information Ministry told us to stop lowering rates because Hanaro was running a deficit and give them a chance. It’s absurd that we are being fined.” KT, now a private company, used to be run by the government. For 16 years starting in 1981, it was the only player in the market before companies such as Hanaro appeared. Since then, the Information Ministry has been working to help smaller telecoms survive. “Although it is the commission’s job to decide what is fair trade and what isn’t, we notified the commission about the special characteristics of the communications market and the competition that was involved. We admit we are a bit disappointed at its decision,” said Park Dong-il, an official at the Information Ministry. The Fair Trade Commission said that it had already taken these factors into consideration and lowered the fine from 174 billion won. by Wohn Dong-hee