News out of Korea today stated that the Korea Communications Commission (KCC), the nation's top telecom regulator, will punish SK Telecom and KT if they offer illegal subsidies to attract more iPhone 5 customers.
SK Telecom and KT are Korea's two official distributors of Apple mobile devices. The two are widely expected to continue their illegal marketing activities to achieve this year's smartphone sales goal despite the government's warnings of giving customers heavy subsidies for signing up for the iPhone 5
The KCC will start a thorough investigation of the carriers beginning on December seventh, the day that Apple's iPhone 5 comes onto the market. The government believes that the chances are high that the carriers will offer illegal subsidies to attract more customers. "That's against the law," said an official from the agency.
To make their intentions crystal clear, the KCC summoned marketing executives of the two iPhone carriers to their office to order them not to give excessive subsidies for the new Apple handsets, the official said.
An SK Telecom official supposedly went on record stating that "Because the iPhone 5 supports long-term evolution (LTE) mobile technology for the first time in Apple's history, more iPhone 5 users mean more leverage in the race for LTE-enabled smartphones." The official added he believes that his company will continue offering more subsidies than rival KT.
According to Singapore's Asiaone publication back in July, the iPhone's market share in Korea plummeted to 2 per cent from about 23 per cent" just two years ago. With sales plummeting, Apple quickly dismissed their Korean manager Dominique Oh back in October.
Apple is likely to regain some of their lost market share with their new iPhone 5 with LTE which is a must-have feature to compete against Samsung in Korea. According to the Korean report, SK Telecom and KT received more than 200,000 pre-orders for the new iPhone in just two hours after they were made available on Nov. 30. That's a good sign that Apple could experience a decent come back in Korea during the next quarter.