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To: JohnG who wrote (97178)	4/9/2001 2:33:26 PM
From: JohnG	Read Replies (1) \| Respond to of 152472

Phone Carriers at Odds Over Cutting Subscriptions SK Telecom's move to reduce its mobile phone subscribers has sparked a line of criticism from other mobile phone operators and they have signaled how unfairly it will implement that decision. In a desperate measure, the nation's biggest mobile company decided to attract new subscribers for its competitor LG Telecom. Last Tuesday, the two companies reached an agreement to allow SK sales outlets to be used to receive new subscribers for LG's mobile services from April 6 at the earliest. It is a rare thing for a mobile phone operator to open its sales network for its rival company. ``We took the measure in order to lower our market share below the 50 percent level by the end of June,'' said an SK Telecom official at that time. The two companies hope that the measure will help boost the market share of LGT, which currently accounts for around 15 percent, in line with reducing SK's share. SK will take more than 70 percent of the income from the new subscribers via its sales outlets, after negotiating with LG Telecom to decide how to share profits by sharing sales network. SK Telecom also is now receiving potential subscribers by reservation. ``Instead of stopping to accept new subscribers from April 1, we are receiving reservations on the condition of launching service from June,'' said an unnamed SK employee. ``This is a normal marketing activity.'' ``For those who want to re-subscribe to 011 mobile phone service, we are offering additional benefits such as one-month free call rate packages,'' she said. Against the move, the nation's number-two mobile company, Korea Telecom Freetel, insists that SK Telecom has violated current regulations. ``The move is seen as a strategy to recover its subscription rate after June,'' the company accused in a statement. In addition, it argued that there is a ``definite'' possibility to use subsidies to attract new 019 subscribers. With regard to the subsidy issue, the SK official said, ``Although we are scheduled to give a certain amount of money to guarantee profit margins for sales outlets, it is not a subsidy.'' Last April, the Fair Trade Commission conditionally approved the merger between SK Telecom and Shinsegi Telecomm on the condition that they reduce their market share to below 50 percent by the end of this June. To deal with the limitation, the two companies have set quotas allowing their agencies to sign up only half the new subscribers that they usually sign each month. If the companies fail to lower their market share, they will face punitive fines ranging from 250 million won to 614 million won a day. In addition, the regulatory body says that if it judges that SKT has not made sufficient efforts to lower its share, the fines could rise to 1.13 billion won a day. kdh@koreatimes.co.kr