Hit with $79M fine, SK Telecom, KT and LG U+ push back

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Hit with $79M fine, SK Telecom, KT and LG U+ push back

Published: 12 Mar. 2025, 12:14 Updated: 12 Mar. 2025, 18:47

PARK EUN-JEE
[email protected]

Audio report: written by reporters, read by AI

Pedestrians pass by a mobile phone retailer in Seodaemun District, western Seoul, on Sept. 20, 2022. [YONHAP]

Korea’s antitrust regulator has fined three major telecommunications providers — SK Telecom, KT and LG U+ — a combined total of 114 billion won ($78.6 million) for colluding to keep new subscriber numbers balanced.

The Fair Trade Commission (FTC) said on Wednesday that the three carriers formed a team to prevent a significant number of subscribers from changing carriers to avoid a concentration with one provider from November 2015 to September 2022. Subsidies given to dealers and retailers were adjusted to balance the numbers.

As a result, the average number of customers switching telecom companies — while keeping their phone numbers unchanged — stood at 28,872 a day in 2014, but fell to 15,664 in 2016 and 7,210 in 2022, according to the FTC.

SK Telecom, the largest mobile carrier in Korea, was fined 42.7 billion won, while LG U+ was fined 38.3 billion won and KT was fined 33 billion won.

The FTC said that the fine is tentative and may change as the decision is finalized.

The antitrust watchdog described the case as “a seven-year collusion among three telecom companies,” adding, “We anticipate that the latest findings will enhance competition in the market and eventually reduce the financial burden of phone bills for households.”

The fine is much smaller than the previously speculated range of 3.4 trillion won to 5.5 trillion won last October.

Regardless, the three carriers immediately pushed back, expressing “regret” over the decision and signaling legal action. They argued that they were only abiding by the Korea Communications Commission’s (KCC) guidelines under the now-abolished Mobile Device Distribution Improvement Act, which capped the amount of benefits that could be offered to customers to prevent hypercompetition.

“We regret the FTC’s latest decision,” said SK Telecom in a statement, arguing that it was simply following the authorities’ guidelines. KT and LG U+ also stressed that there had been no collusion and said they would pursue legal action against the FTC.

However, the FTC countered that colluding to balance the number of customers switching carriers went beyond the scope of KCC’s guidelines and regulations.

Updated, March 12: Added comments from the FTC and companies.

BY PARK EUN-JEE, SHIN HA-NEE [[email protected]]