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To: FaultLine who wrote (327)	7/14/2000 9:17:13 PM
From: FaultLine	Respond to of 426

Government strongly encourages formation of consortiums as firms bid for 3G license The Korea Herald Updated: 07/15/2000 by Kim Hoo-ran Staff reporter Whether companies bid as consortiums or not could either make or break their chances at an IMT-2000 license. In the preliminary IMT-2000 operator selection criteria announced yesterday, the Ministry of Information and Communication (MIC) allotted a total of 8 points, out of a possible 102, on management stability and the spread of shares, in a move that "strongly encourages bidders to form consortiums." "In reviewing the consortiums, we will favor those that have stable management control," said Suk Ho-ick, director-general of the telecommunications business promotion bureau at the ministry. If a bidder chooses not to form a consortium, it will automatically forfeit all eight points, lessening its chances at an IMT-2000 license. The preliminary plan was posted on the ministry's Internet site at www.mic.go.kr for a "cyber public hearing" yesterday and will be put through a couple more government meetings before the final plan on how operators will be judged is announced at the end of the month. The disclosure of the various criteria and allotted points, a dramatic departure from past practices, is part of the ministry's painstaking efforts to avoid the scandals that marred the PCS operator selection in 1996. "Bidders will be asked to produce concrete evidence to their claims for categories where such documents are required, to avoid this process becoming a mere beauty contest," said Suk. Bidders' proposals for using existing infrastructure, sharing base stations and networks will also be heavily weighed according to a preliminary plan. "We would like to avoid another round of excessive and redundant investments," said Suk, explaining why five points were allotted each for the use of existing infrastructure and sharing of base stations and network. This is also a category where all bidders could potentially earn 100 percent of the allotted 10 points just by writing up a proposal, Suk added. A new criterion in the upcoming selection that catches the eyes is the provision for consumer rights protection. Companies stand to earn up to five points for coming up with a plan for subscriber protection. Business proposals will be reviewed in three broad categories and must score at least 60 percent in each category and score an average of 70 percent or more across three categories. 35 points can be earned in the category dealing with the service plan and size of infrastructure while 30 points are allotted for the category on the financial status of bidders. Another 35 points deal with the bidder's record on technology development as well as plans for technology development in the future and its technical ability to operate the network. The two additional points are up for grabs for the price which the bidders propose to pay for the licenses, which has been set at 1 trillion-1.3 trillion won by the government. While bidders may disqualify if they write less than the minimum of 1 trillion, 1.15 trillion if there are only three bidders, they do not stand to gain more than 2 points even if they propose in excess of 1.3 trillion won. Emphasizing the government's intention to encourage the formation of consortiums, Suk warned, "It would be dangerous for companies not to form consortiums," apparently alluding to SK Telecom, the market leader which has been reluctant to form a consortium. Korea IMT-2000 Consortium, which previously had said it would open up about 30 percent of its stake to the general public, could be at an advantage as far as the spread of shares is concerned, Suk admitted.