South Korea’s top telecom regulator, the Korea Communications Commission (KCC) said on Wednesday that it slapped a total record fine of 51.2 billion won ($42.8 million) on SK Telecom, KT Corp. and LG Uplus for providing illegal subsidies to prospective customers for using their 5G network services.
In a plenary session, KCC decided to penalize SK Telecom with the heaviest fine of 22.3 billion won ($18.65 million), followed by KT Corp. with 15.4 billion won ($12.88 million) and LG Uplus with 13.5 billion won ($11.29 million).
The huge penalty was higher than the previous 2018 fine of 50.6 billion won against the three carriers for similar violations.
Additionally, the regulator also fined 125 mobile retailers, with 272.4 million won ($227,880) for providing illegal subsidies to their respective 5G customers.
In an investigation, KCC found 119 retailers handing out an estimate of 246,000 won ($206) in additional subsidies in cash rebates and partnership and credit card discounts. The regulator said that the mobile carriers gave out subsidies to attract more customers.
The KCC stated that the three telecom companies were unsuccessful in its retail stores’ supervision, which encouraged the stores to promote unregulated incentives to customers and, hence, violated the country’s mobile distribution laws.
The regulator initially imposed a penalty of around a 100 billion-won but later amended it in consideration of the carriers’ cooperation with the investigation and economic uncertainties brought by the COVID-19 pandemic.
Pledging to Abide by Law
According to the KCC, the three telecom companies pledged over 710 billion won in support funds allotted for small to medium partner companies and investments into network equipment.
Network officials from the involved companies said that they respect the decision made by KCC and would abide by its regulations to prevent future relapses.
The KCC intends to improve its monitoring system in tracking illegal subsidies offered by telecommunication companies in Korea. The regulator said it would also carry out detailed investigations and enforce stricter measures for any unlawful doings.
There are 6.9 million users of 5G as of May’s end, accounting for about ten percent of all mobile service accounts in the country.