KT complains about rivals’ smartphone subsidies

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KT complains about rivals’ smartphone subsidies

Mobile carrier KT yesterday urged the Korea Communications Commission, the nation’s top telecommunications watchdog, to punish rivals SK Telecom and LG U+ for giving out “illegal subsidies” to lure more smartphone users into subscribing to their services.

In a press briefing abruptly arranged yesterday afternoon, the second player in the market said that the other two carriers “took advantage of the interim period between the two administrations and government restructuring” to cause “confusion” in the market.

KT was prohibited from signing up new subscribers to its next-generation long-term evolution (LTE) mobile service from Feb. 22 for 20 days as a penalty for offering subsidies that went over guidelines.

The punishment from the Korea Communications Commission were applied to LG U+ and SK Telecom beginning Jan. 7 for 24 days and 22 days, respectively.

“[Ever since KT’s suspension went into effect] the competition to attract new subscribers was more heated than ever,” said Lee Hyun-suk, head of sales and planning at KT, at the press briefing. “The daily average number of customers who migrated from one carrier to another was 36,700 and the majority came from KT.”

Industry data show the daily average of customers switching carriers last year was 28,090.

KT said its research into Galaxy S3, Optimus G and Vega R3 smartphones, the flagship models from Samsung Electronics, LG Electronics and Pantech, from Friday to Saturday showed KT’s rivals provided subsidies that amounted to the retail prices of the handsets on condition that the user signed up for a monthly plan of 72,000 won ($66) or more.

LG U+ said in a press release after KT’s press conference, “It makes no sense for KT to take issue with subsidies given its past behavior.”

By Seo Ji-eun [spring@joongang.co.kr]
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