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To: Ruffian who wrote (6920)	8/8/2000 3:58:03 PM
From: Jim Lurgio	Read Replies (2) \| Respond to of 34857

More on the Korean thing. quote.bloomberg.com Technology News Tue, 08 Aug 2000, 3:56pm EDT SK Telecom, Rivals Lose Mobile Phone Subscribers for 3rd Month By Ian King Seoul, Aug. 8 (Bloomberg) -- SK Telecom Co. and its four South Korean rivals lost subscribers for a third month in July as business growth slowed and the companies ended services to non- paying customers. SK, Korea Telecom Freetel Corp., Shinsegi Telecom Co., LG Telecom Co. and Hansol M.com Co. said they lost a total of 510,325 subscribers in the month, the second since the government barred the use of subsidies to boost handset sales. Korean cellular companies, in Asia's third-largest market, are trying to shift from building subscriber bases to making them profitable, partly by cutting off non-paying customers who had switched to other companies to take advantage of discounts on new models. ``There will be net contractions for the next couple of months, but then beyond that there will be net growth as the market moves back onto its natural penetration curve,'' said Candice Hwa, an analyst at Goldman Sachs Asia LLC. ``Much of the second-quarter demand was not real to begin with, so I am not too concerned.'' Outlawed The government outlawed purchases of subsidized mobile phones on June 1 to prevent users from switching service providers to buy the latest handset at a discount. The government decided the rapid turnover in handsets, about two per user every 12 months, was causing an unnecessary outflow of royalty payments to Qualcomm Inc. of the U.S. All five of Korea's phone service providers use systems based on code division multiple access technology licensed from Qualcomm. With the subsidies ended, many Koreans find the phones too expensive. A top-end mobile phone can cost as much as $500. Still, savings for the companies may eventually outweigh losses in revenue from smaller subscriber numbers. From January through May, the five companies spent 1.47 trillion won ($1.3 billion) to discount handset prices, a sum close to five times 1999 net income for SK Telecom, the only one of the five to post a profit. SK Telecom, Korea's largest service provider, and new acquisition Shinsegi lost the largest number of subscribers in June, shedding 297,660. As a condition of allowing the takeover, the government required the two companies to lower their combined market share to less than 50 percent by next April. Yet July's losses did little to change SK Telecom-Shinsegi's position relative to competitors. The SK-Shinsegi market share increased slightly to 57.51 percent from 57.4 percent in June. Rivals followed SK's lead by cutting non-paying customers, hampering the market leader's attempt to reduce its market share. KT Freetel -- merging with Hansol M.com next year -- said it lost 66,150 subscribers. Hansol shed 97,585, and LG lost 48,930. The following is a table of subscriber numbers by the end of July. Each company supplied subscriber figures. Millions of subscribers SK Telecom 11.31 KT Freetel 4.90 Shinsegi 3.69 LG Telecom 3.56 Hansol 2.62 Total 26.09