LG Telecom Searching for Foreign Partner
LG Telecom's attempt to find a foreign partner, viewed as being the final hurdle
toward winning the last third-generation (3G) race, is likely to be finalized soon, the
company said yesterday.
Lee Sang-min, a senior managing executive at LG Telecom, said negotiations have
been well underway with three foreign companies to attract their investment in an
LG-led 3G consortium and the decision seems to be imminent.
``We are dealing with two or three foreign telecom companies to form a joint venture
for a 3G consortium and also expect concrete results soon,'' Lee said. However, he
declined to elaborate because the deal is a potentially sensitive subject.
The smallest of the large mobile phone operators is reportedly in talks with three
foreign firms: Verizon Communications of the United States, KDDI of Japan and
Telesystem International Wireless of Canada.
What's more, Lee said that the company is now extensively negotiating with Canadian
telecom giant TIW on more specific terms, compared with other foreign companies.
However, people close to the negotiations said the two companies are allegedly
grappling with some conditions of the deal, adding that some tangible achievements
are expected by the middle of next month.
The Canadian company has demanded management rights in the 3G consortium, but
LG Telecom doesn't want to accept that request.
TIW, the most favorable candidate so far, expressed its intention to join the 3G
consortium with a 25 percent holding of LG Telecom. It will also try to take control
of British Telecom's 21 percent stake in LG.
Earlier this month, TIW executives visited Information and Communication Minister
Yang Seung-taik, asking for the government's cooperation in the domestic 3G
business, the ministry spokesman said.
BT, the second-largest shareholder in LG Telecom, is not interested in the domestic
telecommunications market due to its internal financial difficulties. The troubled British
company didn't participate in the LG Telecom's rights-issue offering last month.
An LG Telecom spokesman said BT was likely to dispose of all its stake in the
company by the end of this year as part of BT's plan to pare back its overseas
operations.
Analysts said TIW's move to become the main shareholder in a 3G consortium has
gained support in view of LG's weak cash flow and other institutional difficulties.
They said there is speculation that foreign telecom companies would take a leading
role in the synchronous-mode 3G business, by expanding its shareholdings in both
LG Telecom and the 3G consortium.
The government awarded last December two of the three 3G licenses to two
consortia led by state-run Korea Telecom and SK Telecom, the dominant cellular
phone carrier in the country.
But the third and last auction for a 3G synchronous-mode operation license, based on
Qualcomm's cdma2000 technology, hit a snag due to a lack of interest by bidders
and its low business perspectives.
kdh@koreatimes.co.kr
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