Korean telcos banned from signing up customers

Country's telecom regulator has banned the three telcos from signing up new subscribers from Jan. 2013, for allegedly offering illegal handset subsidies.

South Korea's three telcos will be banned from signing up new customers from Jan. 2013, for offering illegal subsidies, according to the Korea Communications Commission (KCC). 

According to the Korean telecom regulator in a statement on Thursday, the business suspension comes after SK Telecom, KT Corporation and LG Uplus continued to offer illegal subsidies despite previous warnings.

The move comes after KCC commenced investigations on the firms over illegal subsidies for Samsung's Galaxy S3 smartphones, the Korean news site noted. In September for instance, customers could purchase the phone for 170,000 won (US$158.19) if they commited to a contract and promised to change carriers.

The suspension period is expected to range between 20 and 90 days, from early Jan. 2013, KCC officials told The Korea Times in a report. This is the third time the regulator has issued a business suspension order, as the three telcos have been suspended earlier in 2002 and 2004, the report noted. 

The regulator will collect opinions from the carriers by Dec. 17, and report the results of their month-long investigation over illegal subsidies, a senior official from KCC told the Korean news site. On Dec. 28, KCC will make a final decision on the details of the punishiment, and fix the exact business suspension period according to the carrier, another senior KCC official directly involved with the matter, added.

KCC last week also warned SK Telecom and KT to stop giving illegal subsidies for Apple's latest iPhone 5 which launched in South Korea on Dec. 7, and stressed they will punish the carriers if they keep failing to abide by the law.  A 16GB iPhone 5 is expected to cost 814,000 won (US$751.37), but customers who agree to change carriers can purchase the phone for 400,000 won (US$369.23) with the subsidies.

SK Telecom, KT and LG Uplus have declined to comment on the move by KCC when approached by The Korea Times, citing sensitivity of the issue.

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