South Korea Indicts 3 Mobile Carriers Over Illegal Subsidies

David Lee, April 12, 2016, 8:17 a.m.


Prosecutors said Friday they have indicted South Korea’s three mobile carriers on charges of violating a law strictly banning excessive discounts or subsidies to customers. The Seoul Central District Prosecutors’ Office said the carriers — SK Telecom Co., KT Corp. and LG Uplus Corp. – are accused of paying subsidies far over the limit to retail stores to woo more customers at the time of the new iPhone 6 launch in late 2014.

Prosecutors said three incumbent and former board members of the firms who were in charge of the sales were also indicted. It is the first time for the carriers to stand trial since the new law, which restricts the amount of incentives, was enacted in October 2014. At present, carriers are banned from offering discounts and subsidies in excess of 300,000 won (US$260), 

Prosecutors suspect that SK Telecom, KT and LG Uplus paid up to 460,000 won, 560,000 won and 413,000 won per device, respectively. Local telecom watchdogs have been ramping up efforts to bring transparency to the market long distorted by subsidies far exceeding the legal ceiling to wrest subscribers away from competitors.’

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