South Korea’s three major mobile carriers have been fined a total of ₩114 billion by the Fair Trade Commission (FTC) for colluding over a seven-year period to restrict competition in mobile number portability.
On the 12th, the FTC announced that it had uncovered evidence that SK Telecom, KT, and LG Uplus had coordinated and implemented measures to control the number of subscribers switching carriers through number portability.
As a result, SK Telecom was fined ₩42.66 billion, KT ₩33.02 billion, and LG Uplus ₩38.33 billion.
According to the FTC's investigation, the three telecom companies agreed to regulate the flow of subscribers switching carriers from November 2015 to September 2022, ensuring that no single carrier gained a disproportionate number of new users.
Notably, they operated a joint office known as the "Seocho Situation Room," where they monitored daily mobile number portability trends and adjusted the levels of sales incentives (rebates) to limit competition.
The carriers manipulated sales incentives to control subscriber migration.
Sales incentives, a form of rebate provided through distribution channels, naturally attract more subscribers to the carrier offering higher payments. By coordinating these incentives, the three companies sought to prevent excessive subscriber movement to any particular carrier.
The FTC confirmed this collusion through internal documents. One document stated, for example, that if trends became unfavorable for LG Uplus around 6:00 PM, SK Telecom and KT had verbally agreed to immediately lower their sales incentives.
Additionally, when KT saw a spike in mobile number portability subscribers, a KT official contacted an SK Telecom representative to apologize and promised to lower KT’s sales incentives the following day—a clear indication of coordinated actions.
As a result of this collusion, the volatility of the mobile number portability market significantly declined. The daily average fluctuation in net subscriber transfers, which stood at around 3,000 cases in 2014, dropped to below 200 cases after 2016. The total number of mobile number portability cases also plummeted by 75%, from 28,872 in 2014 to just 7,210 in 2022.
An FTC official stated, "As competition in mobile number portability was restricted, consumers received fewer financial and non-financial benefits when switching carriers. This measure is expected to stimulate market competition and help reduce consumers' telecommunications costs."
Meanwhile, the three telecom companies have denied the allegations of collusion and announced plans for legal action.
They claimed, "We merely followed the guidelines set by the Korea Communications Commission to comply with the Terminal Distribution Act, and no collusion took place."
Furthermore, they indicated their intent to challenge the decision in court, stating, "We will proceed with legal procedures after reviewing the FTC’s resolution document.
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Three Telecom Companies Colluded on Number Portability for 7 Years… FTC Imposes ₩114 Billion Fine
South Korea’s three major mobile carriers have been fined a total of ₩114 billion by the Fair Trade Commission (FTC) for colluding over a seven-year period to
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