KT-business operation

By Lee Minji

SEOUL, March 14 (Yonhap) -- KT Corp., South Korea's top fixed-line and No. 2 mobile operator, resumed attracting new mobile subscribers on Thursday following the expiry of a government-imposed 20-day suspension.

KT had been under a business suspension imposed by the Korea Communications Commission (KCC) on charges of doling out excessive subsidies to smartphone buyers last year.

The communications watchdog levied a combined 11.9 billion won (US$10.8 million) in fines on the country's three mobile operators -- SK Telecom Co., KT and LG Uplus Corp. -- in addition to business suspensions ranging from 20 to 24 days.

Smallest player LG Uplus was first suspended for 24 days from Jan. 7 to Jan. 30, while top player SK telecom resumed operations on Feb. 22 after a 22-day suspension.

Despite the regulator's move, market competition and smartphone subsidies remained rampant during the cited periods, raising doubts on the effectiveness of the suspension.

Critics also claimed the current 270,000 won cap on subsidies is inappropriate given the high price of the latest smartphones.

Market watchers forecast competition to continue in March and start to fizzle out in the second quarter.

"Competition to gain a bigger stake is likely to continue until the end of the month as mobile carriers are eager to claim a bigger part of the long-term evolution market," Korea Investment & Securities Co. analyst Yang Jong-in said by phone.

"But government moves to further clamp down on subsidy policies is a market factor to keep tabs on," Yang said.

The KCC is set to address the countermeasures against smartphone subsidies at its meeting later in the day.

The meeting follows a gathering of presidential secretaries that called for moves to curb smartphone subsidies, citing the issue a "social problem" because it overheats the market.

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