"KT Number Porting Offers PS4 and Dyson" Year-End Telecom Market Turmoil Over 'High-Value Prizes'

[Asia Economy Reporter Joeslgina] "Sony PlayStation 4, Nintendo Switch, Dyson cordless vacuum cleaner, Smart TV, mini clothes dryer, air purifier..." This is not a newlywed couple's wedding gift list. It is a list of prizes that can be received when purchasing a new smartphone and switching carriers to KT.

With the launch of new flagship models such as the Galaxy Note20, the controversy over high-priced prizes in carrier distribution networks has resurfaced. After cracking down on 'illegal subsidies,' illegal activities featuring prizes worth tens of thousands of won are rampant, further confusing the market. The 'guerrilla' method of briefly announcing during specific times such as weekends cleverly evades the Korea Communications Commission's crackdown.

◆High-priced prize controversy during number portability

According to the industry on the 16th, some distributors have been actively securing subscribers by offering high-priced prizes such as PlayStation 4 to customers who purchase the Galaxy Note20 through online malls and switch their number to KT since last weekend. The confirmed prize list includes high-priced items such as PlayStation 4 and Nintendo Switch, which sell for over 300,000 won in the market, as well as Apple Watch 3 and AirPods Pro priced in the 200,000 won range. Another prize, the Dyson cordless vacuum cleaner, sells for 430,000 won, and the NanoWheel electric scooter sells for 300,000 to 370,000 won.

These distribution networks provide these prizes when a family or two people purchase smartphones. When a single person purchases, additional fees are requested from the subscriber. This is essentially a strategy to induce additional number portability targeting family or acquaintances.

Distributors introducing themselves as KT's official online shopping mall also held similar prize events for customers who purchased the iPhone 12 mini at the end of last month. One subscriber who purchased the iPhone 12 mini said, "I received a PlayStation 4 as a prize on the condition of switching numbers to KT with my family," adding, "I wondered if it was exaggerated advertising, but I trusted it because it was said to be KT's official online shopping mall."

◆Difficulties in crackdown due to guerrilla-style announcements

The problem is that such excessive prize events are ultimately causing market confusion. An industry insider said, "Large-scale prize events are being announced guerrilla-style across models like Galaxy Note20 and iPhone 12 on online distribution networks with official carrier titles." It was explained that not only KT but also SK Telecom and LG Uplus sales and agencies show similar movements, differing only in prize amounts. However, KT's events are held at agencies under the carrier's management jurisdiction, while SK Telecom and LG Uplus mostly hold events at separate sales points with prior approval.

In particular, KT is currently under a fact-finding investigation by the Korea Communications Commission for intentional delays in activating the Galaxy Note20, so the controversy is expected to grow. Criticism arises that even during the fact-finding period, excessive prizes were provided to secure subscribers while cleverly evading the crackdown. Under the current Device Distribution Act, it is prohibited for carriers to force or induce agencies to provide unfairly discriminatory subsidies to users. The Korea Communications Commission allows prizes only within 30,000 won, such as screen protectors and phone cases. Furthermore, requesting a difference in price while providing high-priced prizes to subscribers at distribution networks can also be problematic, as it may constitute exaggerated advertising.

However, since most of these are conducted guerrilla-style to evade the Korea Communications Commission's crackdown, the authorities' response is not easy. A Korea Communications Commission official said, "If prizes are provided from carrier funds rather than other resources and given to everyone rather than by lottery, there could be issues," adding, "We will monitor the market and respond if problems arise."

After a period of quiet due to the Korea Communications Commission's active administration, the controversy over illegal subsidies and excessive prizes is intensifying recently in a roundabout way as the year-end peak approaches. This also means that the pressure to achieve 5G subscriber targets is significant for each company. Regarding this, KT stated, "Although it is a vendor in KT's official online mall, it is a separate site," and "No violations of the Device Distribution Act have been confirmed on the official mall currently." Since the commercialization of 5G last year, KT has remained third in number portability competition among the three major carriers for 20 consecutive months.

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