Delay of IMT-2000 to raise stock prices of operators
Stock prices of operators planning to offer the next generation telecom service, or IMT-2000,
will rise if the launch of the service is delayed from 2002 to 2003, Daewoo Securities said
yesterday.
The forecast comes two days after Korea Telecom hinted that it was willing to postpone the
launch of the service to conduct further market research. "We would have to consult with the
government, but we could postpone the service period," Korea Telecom president Lee
Sang-chul said on Wednesday.
Korea Telecom, the nation's dominant fixed-line operator, recently was awarded one of the
two available licenses to provide IMT-2000 service based on W-CDMA (wideband code
multiple access) mode. SK Telecom took the other ticket.
"Operators are expected spend big money in the beginning stage of the project to set up
nationwide networks," said Min Kyong-ae, an analyst at Daewoo. "However, in the absence of
appropriate handsets and contents to go along, it's skeptical that a sizable market will be
created. From the point of operators, the investment risk is high," Min said.
Min cited the example of IS95C or cdma2000 1x, to back up his argument. He said the
market for the interim wireless service was not growing due to the high price of handsets and
lack of contents to accommodate the service.
However, Min predicted a trial service of IMT-2000 would take place in May of 2002 as
planned. "A market first has to be formed in order for demand to grow and allow operators to
recover investment," Min said. (KMH)
2001.01.06
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