LG Submits Application for IMT-2000
By Kim Deok-hyun
Staff Reporter
After a tug-of-war for almost eight months, the final consortium, led chiefly by LG
Telecom, has submitted its business proposition for the third- generation (3G) phone
network, widely known as IMT-2000 service here.
The consortium is expected to easily obtain the 3G business license, which is based
on Qualcomm's cdma2000 technology, because it is the sole bidder for the last
auction.
The company has earlier lost the bid for the 3G service based on Wideband-
CDMA, which is largely backed by European and Japanese telecom operators, to
SK Telecom and Korea Telecom.
The Ministry of Information and Communication will grant a third operator the
controversial 3G business by the end of this month.
The consortium has a total of 1,049 companies, including Hanaro Telecom,
Powercomm, Thrunet and 15 other communication operators; 186 mobile handset
makers and equipment manufacturers such as LG Electronics, Sewon Telecom,
Hyundai Syscom and Kisan Telecom; 109 wireless contents and Internet firms such
as Hyundai Motor, Kia Motors, Hyundai-Sega Entertainment, and Nice Information
and Communication; 279 distribution firms, including Hanjin Shipping and Samyang;
140 network builders, including Samwhan and Imkwang Construction; and 317
business base builders, such as the Korea Federation of Small Business, Taeyong
and Union Steel.
Outwardly, the consortium casts a bright picture for the future. LG Telecom had
some 4.5 million mobile phone subscribers at the end of last month. Hanaro Telecom
and Thrunet have more than 1.8 million and one million high-speed Internet customers
respectively.
``The last 3G consortium has already secured a total of 7.3 million customer base,''
said LG Telecom senior managing executive Lim Byong-yong. Lim added the
consortium would use their existing wired and wireless infrastructures to compete
with SK Telecom and Korea Telecom.
In addition, the consortium also plans to expand its global presence to build a
so-called CDMA belt in Asia-Pacific region, by linking the service in North and
South Americas, Australia, China, India and South-East Asia.
Wrapping up a nearly three-year-old proceeding for the three 3G operators, the
submission of business plans also meant the opening of new chapter in the domestic
telecommunications industry.
A consolidation in the telecommunications sector would gather steam with the
submission of business plans by the LG-led consortium.
The government seeks to use the last 3G auction as a catalyst to spur consolidation in
the overcrowded telecom sector.
According to observers, it might take time for the domestic telecommunications
industry to be realigned into three-way competition in accordance with the
government's proposal.
Firstly, the challenger does not have enough financial strength to compete with two
telecom colossuses, SK Telecom and the state-run Korea Telecom.
Some market observers cautiously said no synergy effects are expected from the
strategic alliance among LG Telecom, Hanaro Telecom, Dacom and Thrunet.
Amid such a negative outlook, the latecomer seemed to rely on the government for its
fate. In fact, the government has pledged to give a wide range of help to the last
consortium, including a de facto reduction of licensing fees and some financial
benefits.
For instance, until the small latecomers have viability, Information and Communication
Minister Yang Seung-taik has repeatedly said the government would impose market
share restrictions on the country's dominant wireless carrier SK Telecom. But, the
ministry has yet to figure out how the government will regulate the market share.
Worse, the prolonged alliance talks between LG Telecom and Canadian telecom
operator Telesystem International Wireless (TIW) is expected to become a snag in
the consortium's future.
If the TIW refuses to join the consortium, LG Telecom will face a severe financial
headache in building its 3G network and rolling out the service.
But, LG Telecom's Lim downplayed those speculations, saying the negotiations with
Canada's TIW is reaching its final stage.
Meanwhile, LG Electronics will hold a 27 percent stake in the consortium, Hanaro
Telecom 10 percent and Powercom from 3 to 4 percent but the company will be
managed jointly by LG and Canada's TIW.
kdh@koreatimes.co.kr
ÀԷ½ð£ 2001/08/05 16:07
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