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Cellcos implore government to censure SKT for subsidy violations

25 Mar 2004

Two of South Korea’s smaller mobile operators, KTF and LG Telecom, have called upon the government to impose a nine-month business suspension on the country’s leading player SK Telecom, over claims that the operator is continuing to violate subsidy regulations. The two companies have called for their larger rival to be punished in accordance with the strict terms of its merger conditions with Shinsegi Telecom in 2002, saying that ‘ in defiance of the merger terms, SK Telecom has kept using subsidies to sustain its monopolistic status in the market. The cumulative subsidy-related fine of KRW42.7 billion on SK Telecom since 2002 is evidence of that’. Under the Law, the Ministry is empowered to revoke a licence if a merger condition is breached, or impose a nine-month suspension on the transgressor. Although the industry watchdog, the Korean Communications Commission (KCC), stepped in in November 2002 to impose a one-month ban, LG and KTF insist that the government should do more to ensure that SKT’s market share be kept below 50%. It currently stands at 54%.

South Korea, LG Uplus, SK Telecom (SKT)

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