KT President Offers to Resign Sparking Technology Speculation
By Ian King
Seoul, Nov. 15 (Bloomberg) -- Lee Kye Cheol, president of Korea Telecom Corp.,
said he will step down prompting speculation that the country's largest phone
company will change its choice of technology for a new cellular service.
Lee, according to Korea Telecom, told directors he will quit to give a new chief
executive the time to prepare for important new businesses that the company will
enter into next year. His successor could be appointed at a shareholders meeting
Dec. 19.
Analysts said Lee was the major advocate of a standard called Wideband Code
Division Multiple Access which the company said it will use if it wins one of three
new phone licenses being awarded this year. The government is trying to force one
of the bidders to use a rival system called CDMA-2000 offered by Qualcomm Inc. to
help equipment local equipment makers.
``Lee had been adamant in going against the government's wish that some of the
bidders opt for the CDMA2000 standard rather than WCDMA -- despite Korea
Telecom being a state-run company,'' said Bahn Young One, a telecommunications
analyst at Good Morning Securities Co. in Seoul. ``Investors are afraid that his
resignation will mean that Korea Telecom or KT will be the one forced to drop
WCDMA.''
The so-called 3G licenses will be awarded at the end of the year and will entitle the
winners to use broader frequencies needed to provide new services that will let users
access the Internet quicker. That, in turn, will allow providers to charge their
customers for video conferencing or downloading data.
WCDMA Focus
Korea Telecom and its rival bidders SK Telecom Co. and the LG Group all specified
they will use WCDMA -- citing cheaper equipment and roaming offered by a
standard which is forecast to be taken up by 80 percent of the world's cellular
providers -- when they submitted bids.
The three ignored a government ruling which stated that if all bidders choose one
technology, only two licenses will be awarded this year. The Ministry of Information
and Communication made the ruling after equipment makers such as Samsung
Electronics Co, said that they would lose orders if all of the service providers went
with WCDMA -- a standard backed by Nokia Oyj and Ericsson AB.
Analysts speculated that KT was the most likely to bow to government pressure to
change its choice as it's the owner of the largest block of shares in Korea Telecom.
Korea Telecom shares today fell 2.4 percent to 69,200 won compared with a 0.8
percent rise by the Kospi index.
The bids, submitted last month, are currently being graded according to several
criteria. These include the strength of the bidder's finances, technology and track
record in the industry, resulting in speculation as to who will make the strongest
proposal. The results are due in December.
ragingbull.altavista.com |
