re: Korea KTF profile and cdma2000
On the "3G look alike service" referred to in previous article:
"KTF completed its pilot operation of cdma2000 1x, or 2.5G, mobile network services, based on Qualcomm's technology, and is planning to launch the high-speed service by next May. 2.5G services can download data at 850 kilobits per second and the speed is well applicable for wireless multimedia services on the move, experts said."
Presumably "3G look alike service" refers to the fact that this service will operate in existing rather than core IMT-2000 spectrum.
The bragging rights go to what technology is deployed at the World Cup in Seoul.
It is a little early for a WCDMA gamble, but then again, it is also a little early for 1xRTT with 1xEV-DO.
>> KTF Takes Bold Step Toward Mobile Frontier
Kim Deok-hyun
Korea Times
2001/05/27
For a man who was at the helm of the nation's biggest-ever corporate merger, Lee Yong-kyung, president of KTF, seems outwardly imperturbable with his self-effacing manner and soft voice.
``Our corporate philosophy is to maximize customer satisfaction along with shareholder value as a true mobile Internet service provider,'' Lee said in an interview with The Korea Times.
After a full year of negotiations and discussions, the nation's second- largest mobile communications company was officially formed earlier this month with a paid-in capital of 911 billion won.
The total value of shares outstanding was 7.8 billion won at the close of trading Friday and that figure is around 15 percent of the total market capitalization at Kosdaq.
KTF is the product of a merger between the nation's second and fourth largest wireless phone operators _ Korea Telecom Freetel and Korea Telecom M.com_that took effect May 1 under the ambitious catchphrase of ``Mobile Life Partner.'' Last week, the merged company broke the 9-million-barrier in mobile phone subscribers.
In line with the merger, the nation's power structure in the telecom industry has been realigned into a three-way competition _ SK-Shinsegi Telecomm, KTF and LG Telecom.
According to the latest statistics released by the Ministry of Information and Communication, domestic mobile phone penetration accounted for around 26.6 million users as of late April. SK-Shinsegi Telecomm controlled 52.2 percent of market share with 13.6 million subscribers. KTF marked 33.2 percent with almost nine million users. The smallest big carrier, LG, had only 14.6 percent of the market with around four million subscribers.
In comparison to the general malaise, where people believe that this year will bring less business, more downsizing, and additional splashes of red ink, KTF's prognosis is bright, and executives predict that the year 2001 will probably be its best year yet.
One month before the merged company was created, Korea Telecom Freetel announced 59 billion won in net profits on record sales of 751 billion won across the first three months of this year.
Buoyed by the government's ban on subsidization, where the companies incurred a loss on the hand units to make profits with service charges, KTF recorded the largest-ever quarterly net and revenue for the first quarter of this year.
``Over the next four years, we will take all-out efforts to leap toward the world's top 10 mobile telecom carriers,'' Lee said.
As part of delivering on their mid-term vision, KTF announced a four-point management strategy. It will focus on maximizing synergy effects derived from the merged company, cementing its position as an unbeatable second- generation (2G) operator, paving its way to becoming a successful 3G mobile network carrier and gaining a No. 1 position in wireless Internet service this year.
He added that the company is expected to garner between 250 billion and 300 billion won in net profits on sales of five trillion won this year.
Lee, 54, who obtained a Ph.D. in electronic engineering from the University of California, Berkely, is an incumbent chairman of Global Business Dialogue on Electronic Commerce (GBDe).
KTF is now considering switching its listing from Kosdaq to the Korea Stock Exchange by the end of fiscal 2002. It hopes by that time to be making enough profit to quash its 360 billion won of accumulated losses so far. ``That is quite achievable,'' Lee said, adding that the listing would be decided by whether or not it maximizes shareholder value.
``We are the only pure cellular player in the country without risks posed by sprawling family-owned business conglomerates,'' Lee said.
Analysts also said the merger will realize 5.2 trillion won in benefits over the sum of their expected individual performances over the next five years. The Boston Consulting Group gave an even greater figure for the synergy effect, 5.88 trillion won, even after deducting the 500 billion won in merger costs.
The consultancy firm said that a strategic synergy would arise through an increased customer base, and the increased call frequency would account for a benefit of 3.3 trillion won. The additional benefits from effective investment would account for another 2.5 trillion won and the financial synergy from effective capital amounts to another 80 billion won. Additionally, merger costs are limited to network reorganization and promoting a unified brand image.
Samsung Securities gave another figure for the overall synergy effect, 7.5 trillion won, and Merrill Lynch said 4.2 trillion won.
Based upon generally accepted accounting principles, its fourth consecutive quarter of robust growth in terms of earnings before interest, taxes, depreciation and amortization (EBITDA) made the company one of the blue chips on the Kosdaq stock market.
In another green light for KTF, it was announced early last week that the company was recently listed on the Morgan Stanley Capital International (MSCI) index, the world's most influential compiler of share indexes for institutional investors.
The move could positively affect KTF's shares because it is now free from such traditional chaebol practices as combining family control and cross- shareholdings between related companies, according to Kyobo Securities researcher Park Min-ho.
Park continued to say that the MSCI index defined free float as the percentage of a company's shares that are deemed to be available for purchase on the market. This means that companies with a small free float would see their weightings decrease, while those with a larger free float will be increased.
Last weekend changes in the MSCI index boosted Korean shares. At that time, the MSCI adjustments spurred foreign buying overnight and brought the key Korea Composite Stock Price Index (KOSPI) up 3.1 percent.
Confidence came easy to KTF because it has the infrastructure, the business partners and the vision to take full advantage of the revolution just beginning in true mobile Internet telecommunications.
The company has developed ad campaigns focused on four distinct customer groups_``Na'' for teenagers and 20-somethings, ``Drama'' for women, ``Viz'' for corporate clients and ``Magic N'' for wireless Internet service_and its brands are in a relatively strong competitive position against its arch- rival SK Telecom.
Particularly, its wireless Internet service has offered not only e-mail but also a growing array of interactive services such as games and stock trading, which brings in lucrative fees for service providers.
KTF completed its pilot operation of cdma2000 1x, or 2.5G, mobile network services, based on Qualcomm's technology, and is planning to launch the high-speed service by next May.
2.5G services can download data at 850 kilobits per second and the speed is well applicable for wireless multimedia services on the move, experts said.
With regard to the third-generation (3G) dilemma, Lee cautiously approached the topic. ``3G service isn't very new, but is a one-step evolution over current service,'' he said.
``We see that it is in this part of the world where 3G service is really taking off but these things take time,'' Lee said. ``There is an initial period where people are trying things out and services are still improving.''
On the government's recent moves to control the market share of the mobile phone carriers, he supported the action in basic conception, commenting that it is necessary for latecomers to guarantee a fair competition environment.
``KTF's performance was mediocre, given its deep cut in marketing costs and promotion spending, and it is likely to be a major beneficiary by SK Telecom's mandatory efforts to lower its mobile phone subscribers,'' said Jin Young-wan, a telecom analyst of Hanwha Securities.
He predicted that KTF's full year earning won't be much higher than last year's since its marketing costs will rise from the third quarter, as SK Telecom will move to regain its market share after it passes the 50 percent market share deadline in June. <<
- Eric - |
