“I got a warning letter for selling a phone for 1 million won” (telecom industry official)

The Korea Communications Commission (KCTC) has issued a warning letter in the latest cell phone subsidy scandal.

According to the telecommunications industry on the 4th, the regulator sent a warning letter to KT and LG U+, saying that it “sternly warns” them regarding the recent controversy over the record-breaking subsidies for Samsung’s top phone, the Galaxy S23 series. This is the first time since 2021 that a written warning has been issued to a telecom company instead of a verbal warning.

The reason for the warning is that they have been offering record subsidies of more than 1 million won, causing the market to overheat. Recently, Samsung’s top smartphone, the Galaxy S20 Ultra, which costs 1.6 million won, was sold for 300,000 won at mobile phone collective distribution centers and some sales outlets. For a short period of time, mobile phone subsidies of up to 1.3 million won were provided. The basic version of the Galaxy S20 became a zero-cost phone메이저사이트.

The KFTC believes that KT and LG U+ offered more subsidies than the disclosed subsidies based on the Device Distribution Act to attract subscribers. The KFTC also reportedly called marketing executives of the three telecom companies to warn them about the illegal subsidy scheme.

Samsung Galaxy S20 Ultra

In order to prevent discrimination between users and market confusion, Korea has implemented the Device Distribution Act (Dantong Act), which regulates the amount of mobile phone subsidies (only 15% of the carrier’s subsidy), but customers are also complaining about this.

The theory of futility has been raised. The crackdown is ineffective, and there are growing complaints that there is nothing wrong with selling expensive cell phones cheaply.

The written warnings issued by the NTA are also not legally binding as part of the administrative guidance. It seems that the crackdown is being relaxed to minimize market disruption rather than imposing fines. As a result, they are ineffective.

[Photo, Yonhap]

A telecommunications industry official said, “Not only is it ineffective, but under the current system, customers flock to spot stores that offer illegal subsidies, so it would be better to abolish the short-call law.”

On the other hand, there are still voices calling for the law to remain in place. “You can say that there is nothing wrong with simply selling cheaply, but we should also consider the situation where the limited marketing expenses of telecom companies are only provided to some customers for subscriber defense, leaving the majority of consumers without benefits,” said an industry insider.

Meanwhile, discussions on revising the notoriously ineffective Handheld Device Distribution Act (Dantong Act) are also in full swing. The government is discussing revising the Dantong Act as one of the measures to lower telecom costs by promoting competition among telecom companies.