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(LEAD) LG Uplus business suspension comes into effect
By Lee Minji
SEOUL, Jan. 7 (Yonhap) -- LG Uplus Corp. was suspended from attracting subscribers Monday, as the first of three South Korean mobile companies to be punished by the nation's communication watchdog for offering discriminative mobile subsidies.

   Under the Korea Communications Commission (KCC)'s punitive measure, LG Uplus has been banned from receiving new subscribers for 24 days. Following the suspension, bigger players SK Telecom Co. and KT Corp. will also be blocked from taking on new subscriptions for 22 days and 20 days, respectively.

   The business suspension is part of the KCC's attempt to block excessive competition. Last month, the watchdog fined a combined 11.89 billion won (US$11.18 million) in addition to the suspensions for offering discriminative subsidies to lure customers.

   SK Telecom was fined 6.89 billion won, with KT and LG Uplus each slapped with 2.85 billion won and 2.15 billion won in fines.

   The KCC said it found the three companies had discriminated against subscribers by paying subsidies over 270,000 won to certain users between July and December last year.

   As part of efforts to recoup losses from the restriction, LG Uplus has been turning to existing customers.

   On Monday, the No. 3 mobile carrier kicked off marketing events offering sales on feature phones and complimentary gifts to subscribers who upgrade their feature phones to smartphones.

   Meanwhile, the Korea Association for ICT Promotion, headed by SK Telecom chief executive officer Ha Sung-min, said it has begun a "phone paparazzi" program to clamp down on online outlets that pay excessive subsidies.

   "We've been getting inquiries on the policy and also found that the number of subsidies fell following (policy's) announcement," said an official from the organization.

   Despite the beginning of the 66-day business suspension, shares of mobile carriers ended higher. LG Uplus added 1.82 percent to 7,830 won, while SK Telecom rose 1.63 percent to 156,000 won and KT gained 0.82 percent to 36,800 won.