Beginning on April 27 when it was allowed to resume normal business operations, the company has signed up about 90,000 new customers, about two-thirds of the customers lost in 45 days, within only six days.(image:KT)
SEOUL, May 7 (Korea Bizwire) – KT, Korea’s No. 2 mobile telecom service operator, has regained most of the subscribers lost to its rivals during its 45-day suspension period.
Beginning on April 27 when it was allowed to resume normal business operations, the company has signed up about 90,000 new customers, about two-thirds of the customers lost in 45 days, within only six days. That’s largely because of the low-cost handsets that the company offers to new number portability customers.
To this, SK Telecom and LG Uplus countered that KT is luring away their subscribers by giving away expensive phones such as the Samsung Galaxy Note 3 and LG G Pro 2 at deep discounts.
Under the current law, telecom service providers are strictly prohibited from giving handset subsidies to new customers. The reason the three service operators were hit with suspension orders and took turns to be suspended for retail business was precisely because of the subsidy giving competition.
According to KT, it lowered the prices of the Galaxy S4 Mini and Optimus GK to 259,600 won, more than a 50-percent cut from regular prices. In addition, the iPhone 4 and iPhone 4s have become part of the low-cost handset offerings as it has been more than 20 months since launch. For six days since April 27, KT said as many as 40 percent of new subscribers opted for these low-cost handsets.
But KT’s competitors said, “Although KT is saying the percentage of new customers getting low-cost handsets was more than 40 percent, the actual ratio is only 20-percent level while paying subsidies of 800,000 to 900,000 won per high-specs smartphone models.”
An official of a KT rival company said, “KT is circumventing the law by deceiving the authorities that they are selling display models or helping low-income families.”
The Korea Communications Commission last week put out a warning to all three companies, with a follow-up inspection on May 1 in several KT retail outlets whether they are in violation of handset subsidy bans. The controversy will continue for the time being as KT will beef up its marketing activities to sign up more customers at the expense of the rivals.
Written by Sean Chung (schung10@koreabizwire.com)
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