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Telecoms Rig Phone and Internet Rates

Posted March. 28, 2005 23:02,   


The Fair Trade Commission said it would impose sanctions against cable phone companies, KT, Hanaro Telecom, and Dacom, for price increase collusion in inter-city, long distance, and international phone rates, as well as internet fees.

An official at the Fair Trade Commission said on March 27, “We have investigated on whether price-rigging moves have been made to collectively raise phone rates since last July,” and that “(price-rigging in) intercity call rates and internet-only user fees at PC facilities have been confirmed, in which we will determine the level of sanctions, including fines, at a general meeting.”

According to the Fair Trade Commission, KT, Hanaro Telecom, Dacom, Onse Communications, Thrunet, Dreamline, and SK Networks have collectively raised communications fees from 2002 to 2004.

On June 2003, KT began to raise intercity call rates after Hanaro Telecom agreed to raise KT’s presence in the market by 1.2 percent every year.

In the long-distance market, KT, Dacom, Onse, and Hanaro Telecom agreed to raise long-distance phone rates by reducing their discount times and level in 2003.

In the international phone market, KT, Dacom, and Onse united the discount level on May 2003, and collectively raised phone rates by matching prices to the level of the US, Japan, and China.

For internet-only lines at PC facilities, KT, Dacom, and Onse Communications agreed to fix their rates based on KT’s on June 2003.

The Fair Trade Commission outlined its position to impose massive fines on the illegal price collusion activities of telecommunications companies, generating interest in the level of restrictions to be imposed.

Chi-Young Shin higgledy@donga.com smhong@donga.com