Korean minister hints at telecoms deregulation
Reuters, Jul 25 2002
SEOUL, July 25 (Reuters) - South Korea's new information minister indicated on Thursday he would begin a new telecoms deregulation drive, which analysts said would foster more competition in one of Asia's leading markets.
South Korea has encouraged mergers among smaller operators to reshape its telecoms sector around three powerful players, including SK Telecom <17670.KS> and KT Corp <30200.KS>.
"The market is changing rapidly," minister Lee Sang-chul told reporters. "It would be difficult to ignore market principles and stick to the existing system."
Yang Jong-in, a telecom analyst at Dongwon Securities, said he read the minister's remarks as pointing toward deregulation and an end to state support for small firms.
"The minister stressed market principles, which means more deregulation," Yang told Reuters.
"The government is likely to scrap measures to protect smaller players, which is good for SK and KT," he said.
SK, Korea's top mobile carrier, is required to pay higher connection fees than rivals KT Freetel Corp <32390.KQ> and LG Telecom Ltd <32640.KQ> as part of the government's bid to help the two smaller firms compete better.
But the government-led mergers among smaller players failed when Hanaro Telecom Inc <33630.KQ>, Korea's second-largest broadband service operator, called off a merger with third-ranked Thrunet Co <KOREA.O> in April.
Meanwhile, SK has emerged as a dominant player in the nation's telecom market after it became KT's biggest shareholder in May.
SK sold a 1.79 percent stake in KT last week under government pressure to reduce its stake. Now, each company has a stake of about nine percent in the other.
"They'd better reduce their stake in each other gradually," Lee said.
Lee, KT's former chief executive, was named minister of information and communication in a July 11 cabinet shakeup which replaced the prime minister and five other ministers.
KT, Korea's largest fixed-line carrier, has not named a new chief executive to replace Lee.
Lee said the government would not intervene in the process of naming a new chief executive for KT.
"I have no plan to reject KT's choice," Lee said.
The government completely privatised KT Corp by selling a 28.4 percent stake in May.
KT shares were unchanged at 42,300 won at 0445 GMT, while the the broad market index <.KS11> was up 2.06 percent.
SK shares firmed by 2.1 percent to 243,500 won.
industryclick.com |
