Fresh Korea News .
Korea's '98 Telecom Investment Seen
Dwindling
December 31, 1997 (SEOUL) -- Korea's domestic
information and communications industry, which has
increased investment by 30 percent every year recently, now faces a
reduction of investment and manpower under the International
Monetary Fund loan conditions.
Korea Telecom Corp. (KT) announced it will downsize its management
and become a separate government-funded agency. The telecom firm
plans to freeze its officials' salaries, reduce general expenditures and
shrink its 10 main offices to eight.
In addition, KT will not replace retiring workers with new recruits in
1998, leading to a reduction of 1,000 persons.
SK Telecom Co., Ltd., the largest private mobile phone company, will
refrain from hiring any more employees and slash allowances paid to
officials. Dacom Corp. plans to cut its investments for 1998 by 10
percent.
Dacom, the second overseas and long-distance call operator, also has
to give up its plan to hand over its pay phone business to start-up local
call company Hanaro Telecom Corp.
The IMF's call for austerity is forcing personal communication service
(PCS) companies to amend their investment plans.
Korea Telecom Freetel Co., Ltd., the "016" PCS operator, planned to
invest 1.2 trillion won (US$923 million) in 1998, but it already spent
900 billion in 1997 to expand network facilities.
The company is postponing its investment plans until the second half of
1998 due to a loss in the money exchange value of its US$100-million
commercial loans and uncertain prospects for the 1998 economy.
Hansol PCS Co., Ltd., operator of the "018" PCS, which planned a
1.5-trillion won investment by 1998, already spent 900 billion won in
1997.
The remaining 100 billion to 200 billion won will be decided according
to the economic situation in 1998, the company said.
LG Telecom Co., Ltd. earmarked 800 billion won for in 1997 and 400
billion won for 1998, but the company is reducing its investments by
cutting indirect expenditures.
System integration firms, including Hyundai Information & Technology
Co., Ltd., Samsung SDS Co., Ltd. and Ssangyong Information &
Communications Co., Ltd. are planning to merge business divisions,
relocate officials and freeze wages.
Seoul Mobile Telecom Co., Ltd. and Naray Mobile Telecom Corp.,
the major paging service providers, intend to slash their 1998
investments by 20 to 30 percent.
The two companies, in particular, suffered from poor profits in the
"cityphone" business in 1997.
(Maeil Business Newspaper, Korea) |
