>> LG Files Official Complaint Regarding Fairness In Granting IMT-2000 Licenses
Korea Herald
Kim Min-hee
December 18, 2000
LG Glocom, which failed in its bid to win a license to provide IMT-2000 service, submitted a formal complaint to the Ministry of Information and Communication yesterday regarding the evaluation process, which according to its officials gave the consortium unreasonably low points on technology-related criteria.
The ministry on Friday announced operators to provide the lucrative next generation cellular phone service, characterized by high speed, multimedia services and global roaming. Consortiums led by SK Telecom and Korea Telecom were given the go ahead to deploy W-CDMA (wideband code division multiple access) while the evaluation by an 18 member-jury produced no operator to provide cdma2000 networks.
"It's difficult to understand LG Glocom's elimination, given its technological lead over other contenders in W-CDMA technology. If the government does not appropriately respond to our complaint, we will resort to all possible means of countermeasures, including taking legal steps," said an LG Glocom official.
LG's demands include full disclosure of score cards which the jury used to evaluate the four operators vying for IMT-2000 service licenses.
LG Glocom has specifically raised misgivings over technological criteria, which accounted for 30 points out of a possible 100.
The criteria divided into six items: technological development (6 points), technological contribution of shareholders and strategically affiliated firms (5 points), system composition and services (8 points), compatibility with other networks (3 points), personnel (3 points) and recycling of existing infrastructure (5 points).
On each of these criteria, LG fell behind Korea Telecom-led consortium by between 0.056 and 0.322 points, which effectively led Korea Telecom IMT to join SK Telecom-led consortium in claiming victory.
The government made guidelines that only two operators at the most would be approved to provide W-CDMA networks. SK Telecom, the nation's largest wireless carrier, came on top by earning a total of 84 points. Korea IMT-2000, the only candidate applying for a license on cdma2000 mode, meantime was disqualified after failing to earn a minimum 70 points.
LG Glocom, and many observers, are hardly convinced of the evaluation results, however, as LG Electronics, LG Glocom's biggest shareholder, possesses over one thousand IMT-2000-related patents, ten of which are internationally certified.
Confounding the confusion, the jury said at a press conference held on Friday that SK Telecom and KT Telecom earned higher points because they outlined their technological performance of last six years and five years, respectively, compared to LG's three, when bidders submitted their business plans. The government, meanwhile, has never specified the period in which to outline technological performance.
Meanwhile, it appears the selection process for IMT-2000 operators will not be able to escape some criticism.
According to observers, the outcome of the selection process is a worst-case scenario come true - that is, the nation's two existing chaebol telecom companies were approved to provide W-CDMA networks and no operator for cdma2000 mode.
"It's highly likely that whoever grabs a license to provide cdma2000 networks next year will be shadowed by the two giant telecom companies," said an analyst.
Under such a frame, cdma2000 technology, which Korea was first to commercialize and has much experience, stands a chance of being scrapped, while local parts and equipment makers, which have been preparing for the deployment of cdma2000 technology, will also suffer greatly, the analyst added.
"It looks like the ministry was overtly absorbed in making the selection process transparent and fair leading to an outcome which runs counter to the nation's good in general," the analyst said.
W-CDMA is projected to take over 80 percent of IMT-2000 service market worldwide, while cdma2000 is adopted in Korea, the United States and few other countries.
Meanwhile, an official of LG Glocom said yesterday that the consortium was not considering switching to cdma2000 mode. The government plans to reselect an operator to provide IMT-2000 service based on cdma2000 mode February next year. Hanaro Telecom-led Korea IMT-2000, a loser in the first round, has already expressed its intention to reapply.
However, LG is said to be holding back from issuing a formal statement until the announcement of satellite broadcasting operators tomorrow.
A two-way race is on for a license to operate digital satellite broadcasting between Korea Telecom-led KDB and Dacom-led KBS. KBS is as good as being led by LG, as the group is Dacom's biggest shareholder. <<
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