'5G Free Phone' Fine 51.2 Billion Won... Record High (Update)

KCC Imposes 51.2 Billion KRW Fine on 3 Major Telecoms
SK Telecom 22.3 Billion, KT 15.4 Billion, LG Uplus 13.5 Billion KRW Fines
Largest Since 'Dantong Act' Implementation

[Asia Economy Reporter Koo Chae-eun] On the 8th, the Korea Communications Commission imposed a total fine of 51.2 billion KRW on the three major telecom companies for violating the Act on the Improvement of Mobile Device Distribution Structure (the Device Distribution Act). This amount exceeds the previous maximum fine (50.6 billion KRW in 2018) and is the largest fine ever imposed since the enactment of the Device Distribution Act.

On the 8th, the KCC held a plenary meeting chaired by Chairman Han Sang-hyuk and imposed fines on SK Telecom, KT, and LG Uplus for violations of the Device Distribution Act.

The final amount totals 51.2 billion KRW for the three companies combined, with SK Telecom fined 22.3 billion KRW, KT 15.4 billion KRW, and LG Uplus 13.5 billion KRW. The reduction rate was uniformly set at 45% for all three companies. The fine was calculated by applying a levy rate of 2.2% for SK Telecom, 2.0% for KT, and 2.2% for LG Uplus based on total sales and other performance metrics, followed by a 45% reduction.

Before deciding the fine amount, the KCC held a standing committee meeting on the 29th of last month and invited executives from the three telecom companies for final explanations. The telecom companies appealed for consideration of the fact that excessive competition occurred in the process of aligning with government policies to promote 5G activation and that they contributed to the early stabilization of the market by attracting 5G subscribers.

In response, the KCC took into account the sluggish mobile phone distribution market due to the COVID-19 pandemic, the difficult situation of small and medium-sized retailers, and the telecom companies’ large-scale investments in 5G infrastructure, deciding on a reduction rate of approximately 45%.

This content was produced with the assistance of AI translation services.