Korea to Award Three Licenses for New Mobile Phone Services
--From AOL. -- Cooters
Seoul, June 24 (Bloomberg) -- South Korea will award three licenses for new mobile phone services in order to avoid overlapping and excessive investment, the government said.
The Ministry of Information and Communication, in a report to be submitted to the National Assembly Monday, proposed three as the appropriate number of licenses to award to companies that will provide mobile phone users with a wider range of services, such as high-speed access to the Internet.
Awarding three licenses will mean the recipients will see a profit from the services as early as 2005, while increasing the number to four or five would delay that by at least a year, the report said.
The ministry also said it was leaning towards choosing the recipients according to the quality of their business plans rather than through an auction, although some cash payment component may be included.
The report cited the possibility that large corporations might outbid smaller ones for the licenses then transfer the financial burden to consumers through higher rates as the main reason for deciding against a sale method.
Korea's three remaining mobile service providers -- SK Telecom Co., Korea Telecom Corp.'s Korea Telecom Freetel combined with Hansol M.com Co., and LG Telecom Co., and other bidders are likely to welcome the chance to avoid an expensive bidding war.
The three personal communication service companies, KT, LG and Hansol, which entered the market in 1997 all failed to make a profit until this year, even as subscriber numbers in Korea surged to 27 million, as they were burdened by network investments and promotions to sign up new customers.
Auctions for similar licenses in the U.K. saw companies bid a combined 22.5 billion pounds ($33.6 billion), 10-times the expected amount.
The Korean government will formally announce its IMT2000 policy next week or in the first week of July. It will receive applications from companies for the licenses at the end of September and make a decision by the end of the year.
Jun/24/2000 0:56 ET |
