S Korean Government Fines Telecoms, ISPs For Unfair Marketing"

SEOUL -(Dow Jones)- The South Korean government has fined the country's wireless carriers and Internet service providers, including SK Telecom Co. (SKM) and KT Corp. (KTC), a total KRW5.3 billion for unfair marketing practices.

The Korea Communications Commission, a government-run agency under the Ministry of Information and Communication, said in a statement late Monday it has fined wireless operators SK Telecom, KT Freetel Ltd. (032390.SE) and LG Telecom Co. (032640.KQ) fines totaling KRW1.99 billion for unfairly charging customers for "value-added" services they hadn't requested.

SK Telecom was fined KRW1.4 billion; KTF KRW360 million; and LG Telecom KRW230 million.

Competition in the country's mobile market has intensified following last year's introduction of mobile number portability, which allows subscribers to switch to a rival operator without having to change phone numbers. Number portability has been carried out in stages, beginning with SK Telecom, to give smaller carriers such as LG Telecom and KTF a jump on trying to grow their subscriber bases. Under the plan, LG Telecom subscribers could begin switching this year.

The ministry also said Monday it has fined Internet service providers KT, Hanaro Telecom Inc. (HANA) and Dacom Corp. (015940.SE) a total KRW3.32 billion for offering select customers a discount in order to lure them away from competitors.

Broaband Internet services providers in South Korea are struggling for growth in a market that is near saturation. Around 70% of South Korean households are logged onto the Internet via broadband connections.

Representatives at the companies couldn't immediately be reached for comment.

-By Yun-Hee Kim, Dow Jones Newswires; 822-732-2165; yun-hee.kim@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 22nd March 2005