Profitability of IMT-2000 Under Spotlight
The profitability of IMT-2000 (International Mobile Telecommunication) is once again under
the spotlight as uncertainties surrounding the introduction of the synchronous technologies
remain.
Even Hanaro Telecom, which is about the only company which has shown enthusiasm over
the synchronous platform recently admitted that the business cannot be profitable if it has to
begin things by contributing 1.15 trillion won to the government.
The Information and Communication Ministry has reiterated that it would go out of its way to
help the consortium that pursues the introduction of the synchronous third generation mobile
communications system, but there is no indication that it will accommodate a discount on
the contribution that asynchronous services providers must make.
``The very real prospects are that we have to compete with existing operators which are
already on the verge of introducing their 2.5- generation IS-95C systems,'' one Hanaro official
said.
Since the synchronous platform is a system advocated by the government, there are obvious
disadvantages in utilizing the technology so it has to offer more incentives for operators, he
added.
``Under the current circumstances, we have to compete with companies like SK Telecom
which SK acquired in 1994 without having to make a single won in contribution,'' the official
said.
Under a government guideline for introducing IMT-2000 services, operators must make a
one-time contribution of 1-1.3 trillion won for the fostering of the telecommunications industry.
The two successful asynchronous platform licensees _ SK Telecom and Korea Telecom _
will both be paying the maximum of 1.3 trillion won as the first part of introducing the
services.
``As it stands, SK Telecom has sufficient frequency domain to provide its 2.5-generation
services to 10 million subscribers. Without support from the government, we cannot
compete effectively,'' said one Hanaro official.
However, the contribution of 1.15 trillion won has already been worked into the national
budget and it does not appear to be possible to accommodate a discount of any sort.
In fact, it is for these limitations of the synchronous technology that LG, which failed to win
the asynchronous license, has said time and time again that it will not seek the synchronous
license.
``For the time being, there are numerous ongoing issues, such as the timing for the
introduction of IMT-2000 services, and it is too early to tell what will happen,'' said another
business analyst.
He went on to say that it remains to be seen what additional benefits the government will
offer the synchronous service provider, but Hanaro appear to have its hands full.
jakenho@koreatimes.co.kr
korealink.co.kr |
