SKT faces probe over illegal subsidies
The Korea Communications Commission (KCC) will investigate SK Telecom for possibly providing illegal subsidies for some recent smartphone models via its retail stores last weekend.
The decision came after the nation’s telecom watchdog conducted inspections of retailers and what happened in the market at the beginning of the week.
The KCC normally conducts inspections into the nation’s three mobile carriers, including KT and LG Uplus, whenever some illegal activities are found. This time, however, the KCC said it plans to inspect only SKT.
It will look into whether the nation’s top mobile carrier provided excessive amounts of rebates to some dealers.
KT accused SKT outlets of offering more than 400,000 won i n cash rebates for Apple’s iPhone 6, Samsung’s Galaxy Note 4 and LG’s G3 Cat.6 model.
On Tuesday, KT released a statement claiming SKT dealers in turn used the rebates as illegal subsides for those new smartphones, to lure customers from KT. A spokesman of KT said SKT should be hit with strict legal penalties for disturbing the market, even after the new mobile distribution act took effect a few months ago.
Under the Mobile Division Distribution Act, the rebate should be not more than 300,000 won for one handset within 15 months of a model’s launch.
SKT will pay fine or business suspension if it is proved to have offered illegal rebates.
KCC officials said SKT is under suspicion of having engaged in illegal business activities.
In response, SK Telecom released a statement shortly after the KCC announcement, saying, “The company is taken aback about the watchdog’s decision.”
A company spokesman said there could be few dealers offering illegal subsidies to lure customers despite the company’s strong monitoring.
“The situation of all three mobile carriers will be similar, and SKT already submitted the documentary evidence related to the situation to the government,” the spokesman said.
SKT said it will request that the KCC inspect the three mobile carriers together.
KCC official said even though it has decided to inspect SKT about possible illegalities this time, it doesn’t mean the watchdog will stop monitoring of the other mobile carriers.
“We may be able to conduct additional inspections into KT and LG Uplus if any suspicious illegalities are found,” said Jang Dae-ho, the head of the telecommunication detection team at KCC.