Did you know that in some parts of the world, the term “carrier subsidy” is pretty much nonexistent for smartphones? While it’s a common deal sweetener that’s often considered by many as the best thing about buying new handsets in places like the U.S. and Europe, other places barely dabble in it, much less encourage it.
Take for instance South Korea, the home of Android smartphone giants Samsung and LG. The Korean Communications Commission or KCC recently fined the three big carriers present in SK — namely LG U+, KT, and SK Telecom — because of the fact that they have been giving discounts on handsets through subsidies over 270,000 won or about $252. The fine amounts to a combined total of 11.89 billion Korean won or about $11.09 million.
The multi-million dollar fine is a harsh penalty, for sure. But in the eyes of the KCC, it is apparently still not enough of a punishment. So apart from requiring South Korea’s three big carriers to pay up because of the handset discounts they’ve been giving out, they have also been banned from signing new customers in January of 2013.
The KCC-imposed ban starts on January 7th, and it’s 20 days for KT, 22 days for SK Telecom, and 24 days for LG U+. This means that for most of January, the carriers won’t be able to sign contracts with new customers and give them discounted handsets. This move is the first of its kind, and it’s instructive for all those who might be looking for ways to curb the practice of issuing carrier subsidies for newly released smartphone models in the future.