Mobile Phone Grant to Be Legally Banned

Giving a grant to the consumer who buys mobile phone is to be legally banned beginning next year. Any business company that gives a grant to the consumer can be subject to the surcharge, which is 5 percent of the operating profit, or 50 million won to 200 million won of penalty.

The Ministry of Information and Communication (MIC) announced such a revised electric-communication business law yesterday in order to encourage fair competition in the communication market.

According to the revised law, along with the prohibition of digital grant, maximum amount of surcharge and penalty is to increase, the communication committee will function to regulate the communication service, and the management system regarding electric-communication related disaster will be prepared.

Despite the strenuous request for the revival by the manufacturers, the digital grant is to be prohibited to prevent the negative side effects such as excessive competition and the drain of foreign currency. The government has prohibited the digital grant by the use provision. However, the government decided to make an exception case only when the Minister of Information and Communication notifies to promote the profit of the public and users.

The maximum amount of surcharge will increase from 3 percent of the current operating profit (1 billion won when it is difficult to estimate the operating profit) to 5 percent of the operating profit (1 billion won when it is difficult to estimate the operating profit). The amount of penalty will change from 10 million-50 million won to 50 million-200 million won.

Lee Gi-Joo, director of the communication planning department at the MIC, said that ``since the legal base to prohibit the digital grant is currently weak and illegal activities have continued, the government decided to legalize it.`` The MIC plans to announce the legislation of the revised draft next month after consulting related ministries, and submit the draft to the National Assembly next March.

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