LG, KT submit IMT-2000 business plans based on W-CDMA mode
Two of three consortiums bidding to become IMT-2000 service operators handed in their business plans yesterday, both requesting the W-CDMA (wideband-code division multiple access) mode licenses.
Though this had been expected, the decision by LG and Korea Telecom (KT) foreshadows a three-way fight over the two W-CDMA licenses available. SK Telecom, another bidder, is also expected to request a W-CDMA license when it submits its business plan to the Ministry of Information and Communications today, the deadline for applying for the third-generation mobile service license.
The ministry made an ultimatum earlier this month that one of the three licenses available for the 3G wireless telecommunications services will be offered to a bidder that chooses the U.S.-style code division multiple access, or cdma2000 mode, that the country was the first to pioneer commercially.
The government is trying to assure domestic parts suppliers that they will continue to have domestic buyers, since most produce the cdma2000 mode components.
The three bidders, however, have insisted on adopting W-CDMA, which is expected to take 80 percent of the global market.
The ministry reaffirmed yesterday its earlier position that one of the three service providers for the 3G mobile phones must adopt the cdma2000 mode. Should all three operators apply for the W-CDMA technology, one would be denied a license and the government would try to find a new operator by next spring. The government is expected to announce the results in late December.
LG Consortium, the first of the three operators to submit an application for the IMT-2000 business, consists of 767 companies. LG Electronics is the main shareholder with a 50-percent stake. LG Telecom and Dacom also hold major shares with five percent each.
The 767 firms include 113 communication equipment and part manufacturers, 171 Internet and contents businesses, and 383 logistic and distribution firms. Most of the participants, 751 firms, hold less than a 1-percent stake and together, 18.4 percent.
Some 13 strategic shareholders including Hyundai Motor have the remaining 21.6 percent.
LG has said from the start that it would deploy a W-CDMA service. It was the first local firm to construct an IMT-2000 system testing station using W-CDMA in June last year.
Last July, it also developed a commercial system using a W-CDMA mode IMT-2000 core network, and ran a successful test in video and data communications.
LG consortium said it could offer the system to the public by May 2002.
An LG official stressed that it would prioritize the localization of the W-CDMA technology in cooperation with parts suppliers. The official also said an alliance with Dacom would enable them to provide subscribers with a variety of IMT-2000 services.
Under its plan, the LG IMT-2000 consortium will start operations next year with 300 billion won in initial funding. It plans to attract 450 billion won a year in the first two years, bringing the total initial investment to 1.2 trillion won.
"We have been preparing for the W-CMDA mode IMT-2000 service since 1997, the first in Korea," said Lee Jung-sik, a managing director at LG Telecom. "We possess the best W-CDMA technology in the nation as well as an extensive experience in operating both a fixed-line and wireless telecom service, making us the best possible operator for IMT-2000," he said.
Korea Telecom (KT) also submitted its business plans for the IMT-2000 service based on the W-CDMA mode.
The consortium led by the nation's dominant telecom company, is made up of 636 firms. Korea Telecom is the main shareholder with a 43 percent stake. KT-affiliates, Korea Telecom Freetel and Korea Telecom M.com, also hold major shares with 10 percent and 5 percent each. The company plans to fund 15 percent of its shares with foreign investment.
The 636 firms include 11 facility-based telecom operators, including Onse Telecom, and Seoul Mobile Telecom, and 240 equipment and parts suppliers including Hanhwa, Sung Mi Telecom Electronics, and Daewoo Telecom.
The consortium is also supported by 205 contents providers, including MBC, YTN, Chosun Ilbo, ChoongAng Ilbo, Daum, and Auction and 18 financial institutions like Kookmin Bank, Housing & Commercial Bank, BC Card to participate in the mobile commerce business. The consortium also includes 51 distribution firms including Lotte Shopping, Family Mart, Hansol CSN and Hyundai Corp.
"We are confident we will obtain a W-CDMA license as the consortium is made up of the best firms in each area," said a KT official.
By Kim Min-hee Staff reporter
2000.10.31
koreaherald.co.kr |
