Korea's 3 Mobile Carriers Vow to Root out Illegal Subsidies

Korea's three mobile carriers have promised to stop providing customers with illegal subsidies. This comes... after they were hit with tens of millions of dollars in fines... on top of a minimum 45-day business suspension. Our Laah Hyun-kyung reports. The first thing the nation's three mobile carriers promised... was to root out the practice of offering subsidies to lure customers -- once and for all. At a joint press conference Thursday,... SK Telecom, KT and LG U-plus... vowed to shift their sales paradigm from one oriented around illegal subsidies, to one that's service-oriented. To do that, they will work with the country's handset makers, including Samsung and LG Electronics, to lower the factory price of cell phones... so that retailers won't feel the need to give subsidies to their customers, thereby igniting an unfair competition in the market. The three carriers also plan to launch a market monitoring team run by the three firms. And they will temporarily sever the network of retailers that violate regulations. Thursday's announcement comes after the three were put under a minimum 45-day business suspension by the ICT ministry and the Korea Communications Commission earlier this month. The penalty was their punishment for attempting to entice customers with subsidies. This is a customary tactic in Korea's mobile telecommunications market -- mobile carriers pay a huge chunk of what a customer is supposed to pay for a mobile device. Despite the telecom companies' will to offer better services and stabilize the market,... skeptics say their plan, as of now, is too vague... and that the three are shifting responsibility to the retailers... rather than fixing the problem at the source. Laah Hyun-kyung, Arirang News.