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To: Ruffian who wrote (30453)	5/20/1999 3:14:00 PM
From: bananawind	Read Replies (1) \| Respond to of 152472

Korea Times Article 05/20(¸ñ) 17:27 By Yang Sung-jin Staff Reporter As the Ministry of Information and Communication gave a green light to the installment financing for handset procurement, retailers welcomed the measure, expecting a turnaround of the sluggish sales despite the lingering skepticism. Bowing to the mounting pressure from mobile phone carriers, the ministry said it would allow the installment financing beginning from June 1 after establishing a set of measures to curb side effects. As the news spread, those who ventured out to adopt the installment financing, defying the ministry's opposition, saw a growth in sales, albeit slowly. In mid-May, Shinsegi Telecomm, a mobile carrier, said it would push for the installment financing to lower the initial cost of purchasing handsets and boost sales, which was followed by Hansol PCS, another service provider. Vendors in major electronics distribution centers such as Yongsan Electronics Market said that Shinsegi Telecomm and Hansol PCS were favored by new subscribers after the adoption of the installment financing. A sales agent marketing all the five mobile services at Yongsan said Shinsegi and Hansol outpaced other services in terms of new subscription rate in recent days. According to Shinsegi Telecomm, since the non-interest bearing installment financing was introduced on May 10, the average number of new accounts opening a day surged to 3,000-5,000, up from 1,000. Hansol PCS said the figure tripled since its adoption of the installment financing program. Analysts said the impact of the installment financing on sales is remarkable given that full-fledged marketing has yet to be introduced by other carriers. But the road ahead is still bumpy for carriers getting ready to jump on the installment bandwagon. Those who hold skepticism about the installment financing said that the new payment system will indeed boost sales, but not dramatically enough to turn around the situation. The installment financing cannot rescue the cash-strapped sales agents hit hard by the plunging subscription rate in the wake of the hike in handset prices from April, they claimed. Another negative view is that if other carriers also join the fray, the saluta y effect of the installment financing showcased in Shinsegi and Hansol will disappear. In addition, the installment financing is likely to attract mainly cash-strapp d users, who are desperate to have mobile phone service yet may have trouble paying the bill on time, which does not help to improve the financing structure of carriers in he long run, analysts said. Meantime, the Ministry of Information and Communication and mobile carriers seem to be headed for another showdown concerning the installment financing. In allowing carriers to introduce the system, the ministry set a specific restriction that sparked opposition from service providers. Under the ministry guideline, subscribers should at least pay a third of the t tal subscription fee and handset price when signing up for the service and the installment financing cannot be prolonged beyond 10 months. Service providers said such restrictions are excessive interference, while the ministry countered the measure is designed to ensure consumers have a right to cancel the subscription whenever they want. sjy@koreatimes.co.kr

To: Ruffian who wrote (30453)	5/20/1999 3:21:00 PM
From: bananawind	Respond to of 152472

More on Korean Telecoms and Regulation Foreign Investors Rap Info-Com. Min. for 'Regulatory,Inconsistent Policy' 05/19(¼ö) 17:10 By Yang Sung-jin Staff Reporter Foreign investors expressed displeasure at the ''over-regulation'' and ''inconsistent policy'' of the Ministry of Information and Communication, citing a string of intrusive regulatory measures. In a regular morning meeting organized by the Foreign Investment Committee of the American Chamber of Commerce in Korea (AmCham) yesterday, foreign investors took issue with the ''unreasonable'' regulations of the ministry, which they alleged hampered the investment mood. In a keynote speech entitled ''Bell Canada International (BCI) _ Investment in Hansol PCS'' and question & answer session that followed, James Wilkinson, executive vice president and chief financial officer at Hansol PCS, expressed his critical view of the ministry's over-regulation in the telecom industry. ''The ministry seems sometimes carried away and imposes unreasonable operational and business guidelines on the domestic service providers,'' said Wilkinson, who is from BCI, one of Hansol's two foreign business partners. BCI and American International Group (AIG) forged a strategic alliance with Hansol PCS last August, after they invested 350 billion won for stakes of 22.5 percent and 15 percent, respectively. Wilkinson took the dispute surrounding the installment financing for handset procurement as an example of a typical over-regulation by the ministry. Last week, the ministry announced that it will allow domestic mobile service providers to introduce the installment financing, switching from its adamant opposition _ without offering a persuasive reason. Wilkinson said that the installment financing is a contract between consumers and service operators, a field where ministry regulations beyond a certain limit can be ''cumbersome.'' Other participants also showed dismay and disappointment at the ministry which repeats the same old excuse of ''curbing excessive competition'' for dabbling in the domestic telecom market. ''Of course, there are legitimate regulations and the ministry has improved (the regulatory process) but there's still more room to make improvement,'' he said. In the eyes of foreign investors, the ministry seems inconsistent in regulating new entrants to the facilities-based telecom market, which may undercut its credibility as a neutral mediation body in attracting foreign investment. ''Government policy should be clear and consistent,'' Wilkinson stressed, noting that the ministry's turnabout on the ownership ceiling of LG in Dacom is an example of an ''inconsistent'' policy decision. He said the business environment doubtlessly can change but it does more harm than good to the image of the ministry by reversing the key condition in granting the PCS license to LG Group in less than two years. Another contentious issue is the licensing of B-WLL (broadband-wireless local loop), a high-tech communications network for wireless communications which provide various multimedia services such as high-speed Internet, cable TV and VOD (video-on-demand) via its 26-27GHz frequency. While granting the license to Korea Telecom and Hanaro Telecom Inc. for free, the ministry is demanding what is called a ''contribution fund'' from four bidders. Wilkinson said it is ''unreasonable favoritism'' and the price of the fund should be set at a reasonable level compared with other foreign markets. Aside from the ministry's ''trouble-ridden'' policies in telecom sector, Wilkinson pointed out that Korean managers tend to be preoccupied with the control of management, which is often a principal reason to scupper most investment deals. ''In the areas of corporate governance, control is a very critical issue with Korean companies, unlike Western firms, where profit and shareholder value take priority, '' he explained. To resolve the issue, Wilkinson said Hansol PCS established a board of 16 members, 10 from Hansol Group, four from BCI and two from AIG, combined with specific shareholder rights. ''The shareholder rights require that certain key issues that come before the board need super majority voting in order to be carried,'' he said. Asked on how the improving economic conditions in recent months changed the attitude of Korean managers, Wilkinson replied that there are ''some people raising the issue of management control.'' When it comes to the overall foreign investment environment in Korea, Wilkinson noted that the Korea telecom market had always been attractive but had been limited to foreign investment. It was only after Korea's adoption of the WTO guidelines on opening the telecom sector to foreign participation that BCI began a closer examination of the opportunity, he said. sjy@koreatimes.co.kr