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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (9736)	4/11/2001 8:42:19 AM
From: Caxton Rhodes	Respond to of 197246

Korea's LG Telecom turns to profit in Q1 By Total Telecom staff 10 April 2001 South Korea's LG Telecom, the mobile phone unit of conglomerate LG Group, said on Monday that the removal of handset subsidies had helped it turn its first profit. The company recorded a first quarter net profit of 50.8 billion won (US$37.99 million), Reuters reported, compared to a 52.5 billion won net loss for the first three months of 2000. LG's sales in the first quarter were 450 billion won against 299 billion won this time last year, and it posted 92 billion won in pre-tax profit compared with an operating loss of 37.7 billion won a year ago. "Huge losses arising from heavy expenditures for handset subsidies were mostly reflected in last year's results," a company spokesman told Reuters. "The government ban on such practices, which took effect last June, helped us turn to profit." Analysts gave the results a cautious welcome, Reuters reported, but said that doubt still remained over the firm's financing of its planned 3G services. "The fact that it turned to profit this year is meaningful," Brian Yang, an analyst at Shinhan Securities, told the news agency. "But we cannot confidently recommend a 'buy' for LG as it is now under market pressure for its rights issue plan." LG plans to offer rights worth 300 billion won on 12-13 April to raise funds needed for advanced wireless services, Reuters reported. The company said it expects its two largest shareholders, LG Electronics and U.K. incumbent BT, to take part in the rights issue, but analysts quoted by Reuters think BT will be too hemmed in by its own debt problems to participate. LG, South Korea's smallest mobile operator, had 3.83 million subscribers at the end of March, Reuters reported, representing around 14% of a 27 million-strong market. LG Telecom may still bid for a South Korean 3G license based on cdma2000 technology after failing to win a license based on the European W-CDMA standard in December. The South Korean government is determined to press ahead with its twice-delayed plan to award one final 3G license using Qualcomm's cdma2000 technology, as this is the standard on which most Korean equipment vendors base their products. Local operators have proved reluctant to comply with the state's wishes, however, as they see cdma2000 as less profitable than W-CDMA, projected to become the dominant mobile standard worldwide. LG Telecom and Hanaro Telecom, both units of the LG Group, have said they may enter a bid if the government eases conditions, including a cut in cdma2000 licence fees estimated at 1.15 trillion won ($853.6 million), according to Reuters. Incoming information minister Yang Seung-taik said in March that the LG Group was the best candidate to operate the cdma2000 service and that he would consider reducing the license fee if it opted to bid, Reuters reported.