No Apparent Penalty
The Korea Communications Commission (KCC), the state telecommunications regulator, has penalized SK Telecom with a fine of 23.5 billion won (US$21.3 million) and a seven-day business suspension. The KCC announced that it decided on the sanctions after a series of investigations into KT’s allegations that SKT has been illegally triggering overheated competition in the domestic mobile network market by giving out excessive rebates, so-called subsidies to allure customers.
However, the punitive measures on the dominant mobile carrier do not seem to have gone into effect yet. The KCC said that it would later decide how and when SKT should suspend its businesses, taking into account sluggish market conditions. But by neither fixing the suspension dates nor confirming when it will hold its next committee meeting, the KCC is being blamed for bending the rules for SK Telecom.
Some market experts expressed suspicion of the state watchdog for being lenient with SKT, saying that the decision manipulates regulations to Samsung’s advantage. Samsung’s new smartphones, the Galaxy S6 and S6 Edge, are scheduled to start pre-sales from next April through the SKT mobile network. A business suspension could affect the sales of these new smartphones.
One the other hand, some people in the industry claimed that there might be no problem with the sales of Samsung phones, of which market experts increased sales estimates, recognizing that these latest premium smartphones have been creating strong customer demand with their advanced specs and upgraded features. Rather, their criticism is that the KCC seems to defend SKT under the pretense of the current recession in the domestic mobile network market.