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To: FaultLine who wrote (75570)	7/7/2000 5:08:11 AM
From: FaultLine	Read Replies (1) \| Respond to of 152472

From The Korea Herald 7/6/00 Government to get W3-3.9 tril. for three IMT-2000 licenses The anticipated government plan for selection of IMT-2000 operators was revealed yesterday, leaving it up to the bidders now to come up with the most attractive proposals by the end of September for a beauty contest. In briefing the ruling Millennium Democratic Party (MDC) on its final proposal for the selection of third-generation (3G) mobile telecom operators, the Information and Communication Ministry yesterday said that the three licenses would be awarded based on a review of business proposals. As for the technology standard to be adopted for the 3G service, the ministry left it up to the operators to decide whether to adopt cdma2000 or its rival W-CDMA (wideband code division multiple access) standard. In lieu of an outright spectrum auction, the ministry introduced an element of an auction to the beauty contest, placing lower and upper limits on the contribution amounts. The Informatization Promotion Fund range is set between 1 trillion won and 1.3 trillion won. Businesses will have no incentives to offer more than the maximum of 1.3 trillion won as writing in more will not earn them additional points other than the maximum of two points they can be awarded for exceeding the lower limit, the ministry said. Operators can opt to either make a one-time payment of the pledged contribution or make installment payments. 50 percent of the pledged amount is due at the time the actual business license is given out with the remaining 50 percent, with interest, payable in a series of installments over a ten-year period starting in 2002. The shareholders will be responsible for the contribution amount so that the operators would be prevented from passing down the cost to the end-users. By leaving it up to businesses to decide on technology standards, the ministry said it hoped to encourage cooperation between operators and equipment makers, balancing local industry concerns with prospects in the global mobile telecom market. The government concluded three to be the optimum number of 3G operators, reasoning that more players would result in redundant and excessive investment. Incumbent operators would need to invest about 1.2 trillion won each to rollout 3G service while a new entrant would need to shoulder an additional 400 billion won, according to ministry calculations. However, the ministry said that it would apply equal review standard to both the incumbents and new entrants. With its chances of getting a 3G license apparently diminished by the decision to select only three applicants, Korea IMT-2000 Consortium, the underdog in the four-player race which includes the three incumbents Korea Telecom, SK Telecom and LG TeleCom, immediately put out a statement arguing for a separate review standard for new entrants. "A fair competition is impossible if both the incumbents and new entrants are judged using the same standards," the consortium said. Korea Telecom, meanwhile, called for adjustment in the contribution amount, claiming that high contribution amount will cause a delay in market expansion and weaken the global competitiveness of operators. It also said the duration of the license should be extended to 20 years or more from the 15 years proposed by the ministry. The plan disclosed yesterday could still be modified, as it has to clear a number of hurdles including a public hearing tomorrow and a meeting of Information and Telecommunications Policy Council (ITPC) Saturday. However, ministry officials acknowledged that next week's final announcement will not differ from that disclosed yesterday. The ministry is scheduled to announce the application procedure and review standards at the end of the month, giving potential bidders about two months to draw up proposals. The three IMT-2000 licenses are to be awarded at the end of the year. Updated: 07/06/2000 by Kim Hoo-ran Staff reporter