SK Telecom, Korea Telecom likely to win IMT-2000 licenses, say brokerages
With less than a week left before the winners of IMT-2000 licenses are announced,
brokerage firms predicted SK Telecom (SKT) and Korea Telecom (KT) are likely to
come out victors while expressing substantial doubt over LG Telecom (LGT)'s bid to
land a spot.
There are four contenders in the bid to become IMT-2000 or third generation mobile
telecom service operators - consortiums led by SKT, KT, LGT and Hanaro Telecom.
The first three are vying for maximum two licenses to deploy W-CDMA (wide-band
code division multiple access) network, while Korea Imt-2000, led by Hanaro Telecom,
is the sole candidate for one available, less popular CDMA (code division multiple
access) network operator.
The Ministry of Information and Communication overlooking the bidding process said it
will announce the winners on Friday.
Merrill Lynch said in a report issued Thursday that SKT and KT would win licenses to
operate IMT-2000 service, should the selection process currently under way be carried
out in a transparent and fair manner.
The report comes at a time when a panel of judges is reviewing business plans
submitted by the four contenders at a training center in Chonan, South Chungchong
Province, cutting all outside contact.
In issuing its stance, however, the brokerage firm expressed difficulty in predicting the
outcome, indicating that the government could still play a hand favoring one operator
over another.
The report differs from one the brokerage firm issued two days earlier, which
forecasted only one corporation standing a chance to become an IMT-2000 operator.
The report also suggested that there was possibility that both SK or Korea Telecom
may not be selected.
Merryl Lynch also said that Korea IMT-2000 would have difficulty winning a spot in the
IMT-2000 race.
Its reasons were cited first as misgivings about the make-up of the consortium,
second because the government would try to avoid a consortium with foreign major
shareholders, and last, because neither Hanaro nor its foreign investors have a
experience in the wireless telecommunications business.
In the meantime, Morgan Stanley Dean Witters(MSDW) said in a Thursday report that
both SKT and KT are at advantage to win W-CDMA licenses. The brokerage firm also
said the government would find it difficult to award LGT a license, with the LG Group
being a major shareholder of Hanaro. In other words, the government is unlikely to
award two licenses to the LG Group.
"The chances of KT and SKT receiving the W-CDMA licenses are better with Hanaro
still in the picture and the decision only a week away," the report said.
An analyst at SG Securities drew a somewhat different picture. He said SKT and KT
are strong candidates for the next generation telecom service operators but that the
LG-led consortium is likely to be left out and join the KT-led consortium.
The analysts said that the government was unlikely to play a hand in the bidding
process now, after having failed many times to do so in the past.
The government's decision to move up the date of announcement also reflects its
resolve to no longer interfere, the report said.
The analyst said there was a high chance that SKT and KT were likely to be selected
as IMT-2000 operators deploying the W-CDMA mode, while LG-led consortium is
likely to join the KT-led consortium in the form of equity participation.
SKT has said it would finance the IMT-2000 project on its own with its parent
company's equities, while KT, which is planning to attract foreign capital, might allow
LGT to buy a stake in its consortium.
The report further stated that LGT, even if selected, would not be able to carry out
IMT-2000 service without attracting foreign investment.
KT, however, reportedly is not considering LG as an equity partner at this point.
By Kim Min-hee Staff reporter
2000.12.11
koreaherald.co.kr |
