10/10 06:44
Korea to Force 1 of 3 Phone Licensees to Use CDMA2000 (Update2)
By Ian King
Seoul, Oct. 10 (Bloomberg) -- South Korea said it will reject one of three bids for new mobile phone licenses should all applicants choose the same technology, a boost for local equipment makers such as Samsung Electronics Co.
The decision is a victory for Samsung and other Korean equipment makers, which have concentrated on producing handsets based on a standard known as CDMA 2000 developed by San Diego- based Qualcomm Inc.
The three groups bidding for the licenses, SK Telecom Co., Korea Telecom Corp. and LG Telecom Co., favor a rival technology known as Wideband Code Division Multiple Access, developed by Nokia Oyj, Ericsson AB and NTT DoCoMo Inc.
``If all three choose WCDMA, one will be disqualified, just two licensees will be awarded, and there will be another round of bidding in the first half of next year for the remaining license,'' said Ahn Byung Yub, the Minister of Information and Communication in a press briefing. ``Whatever happens, the frequencies will open for CDMA2000.''
Samsung, Hyundai Electronics Industries Co. and other manufacturers have said they are as much as two years behind in the development of WCDMA equipment. Samsung, Korea's phone system equipment maker, gets about 7 percent of its sales from that division.
``It's positive news for the equipment makers,'' said Keon Han, an electronics analyst at Bear Stearns Asia Ltd. in Hong Kong. ``It's not going to help them this year, but it certainly will going forward.''
All of Korea's cellular providers now use CDMA -- the current Qualcomm standard -- making Korea the largest market for that technology. CDMA2000 is scheduled for introduction in early 2002. SK and Korea Telecom spokesmen said they remain committed to using WCDMA equipment. LG couldn't be reached for comment.
Qualcomm shares rose 2.6 to 91.60 euros in early trading in Germany.
Last week, Kim Sung Woo, representative director and president of Qualcomm Korea Ltd., Qualcomm's Korean unit, said the company holds patents from both types of technologies and that it will receive royalties whatever the choice.
The government will accept applications from Oct. 25 to 31. The proposals will be assessed according to the strengths of their business plans and how much money they bid within the range of 1.1 trillion won to 1.3 trillion ($894 million to $1.1 billion).
Korea had pushed back a deadline for accepting bids for the three licenses from the end of September after local equipment makers said they would lose out to overseas equipment makers if the service providers all chose WCDMA. |
