S Korean carriers fined for collusion

Will the fine prevent these carriers from trying again? Just as importantly, could we begin seeing this sort of thing happening in other parts of Asia as well?

South Korea’s antitrust watchdog on Thursday fined the country’s three mobile carriers a combined Won1.78bn ($1.8m) for price collusion, the first punishment of its kind for wireless operators in the country.

The move follows a Won116bn fine imposed last year by the Fair Trade Commission on KT Corp (NYSE:KTC – news) and other fixed-line carriers for similar charges.

The penalties are expected to put further pressure on wireless telecom service providers, which are grappling with stalled growth in a competitive market.

The FTC said the three operators, SK Telecom (NYSE:SKM – news), LG Telecom and KTF, KT’s wireless unit, engaged in unfair business practices in 2004 by agreeing to discontinue flat-rate services, as competition intensified with the introduction of the number portability system.

This system has allowed mobile phone users to change service providers without changing their phone number. The companies began to allow customers to make limitless calls for a fixed fee at the beginning of 2004 in an effort to attract and retain more subscribers.

But they agreed to end such services in June 2004 because the flat-rate system increased their losses, according to the FTC. SKT and KTF were hit with Won660m of fines each, while LG Telecom received a Won462m fine…. Source: FT.com