The Korea Communications Commission (KCC) has said that it will investigate complaints of illegal marketing practices arising from the introduction last week of mobile number portability legislation.
Since the beginning of this month customers of the nation’s largest mobile operator, SK Telecom (SKT), have been able to switch carriers without having to change their numbers. Subscribers to the networks of SKT’s two rivals, KTF Corp and LG Telecom, are permitted to follow suit from July 2004 and January 2005 respectively. By this morning, four days after the legislation came into force, more than 26,000 SKT users had migrated to a competitor, with LG Telecom taking 15,000 of the total and KTF around 11,000.
In a bid to stop the rot, SKT immediately began calling the migrating customers, allegedly urging them to return to the company. Whilst this practice in itself has caused consternation from both within the industry and the halls of government, it is SKT’s introduction of the message ‘SK Telecom Network’ before connecting calls to differentiate its services from others, that has caused the biggest complaint. The KCC has said it has already launched an investigation into negative marketing and ‘promotional or service identifiers’, saying that SKT will be ‘severely punished’ if found guilty of any wrongdoing.
Whilst SKT has defended its actions as mere adaptation to the new competitive environment, its rivals have been quick to voice protest. In an interview with the Korea Times, one LG Telecom spokesman said ‘The spirit of number portability is to prevent excessive competition by way of branding the dialling prefix. But now SKT is trying to defy this spirit in order to continue its monopolistic status’. At the end of 2003 SK Telecom controlled 54.6% of South Korea’s mobile market with 18.3 million subscribers under its control, ahead of KTF with 10.4 million customers and LG Telecom with 4.8 million. South Korea’s total mobile subscriber base grew by 1.3 million in 2003, of which almost 1.1 million were added by SKT.