December 15, 2000 17:48
Minister of Information and Communication Ahn Byung-yub announced Friday the results of a year-long selection procedure for IMT-2000 licensing, with consortiums led by SK Telecom and Korea Telecom winning the two available slots for asynchronous WCDMA-mode licensing. The third WCDMA applicant, LG GlowCom, was left out in the cold, as was Hanaro Telecom, despite the latter being the only CDMA applicant for the one synchronous CDMA-mode license up for grabs. With LG Glowcom no longer in the picture, SK and KT will lead the next-generation wireless communications industry in Korea and LG Group’s plan to reshuffle its business lines to center around the telecommunications sector has been seriously derailed. The government plans to begin trial service of IMT-2000 services in May 2002.
According to the announced results, SK Telecom earned 84.018 points out of a possible 102 points in the evaluation, followed by KT’s 81.860 points. LG GloCom was just 0.980 points behind KT, with 80.880 points. In the CDMA area, Hanaro Telecom earned only 56.412 points, which was not enough to meet the government minimum of 70 points for licensing.
Ahn said the Ministry of Information and Communication (MOIC) would hold another round of bidding before the end of the year for the unoccupied CDMA spot. Applications will be by the end of January 2001 and evaluation completed in February.
Meanwhile, LG GloCom maintains that it has the most advanced WCDMA technology and finds it hard to believe that it scored the lowest marks in the evaluations. The firm said it would fight the decision if further clarification on the evaluation process is not provided.
Industry observers say if LG was interested, MOIC could allow it to reapply as a CDMA operator for the only remaining IMT-2000 slot. Hanaro said it would definitely apply again in the next round of bidding and would consider forming a consortium with LG.
With the announcement of the bidding results, the shares of various telecommunications firms involved with the two successful consortiums dropped sharply, with expectations that more than W3 trillion in investment will need to be made and unclear profit-generating prospects. Although shares of SK Telecom shot up by W9,000 immediately after the announcement, they eventually began to slide to eventually close at W263,000, which is W15,000, or 5.39% lower than the previous day. KT shares also dropped, finishing 4.29% down from the previous day’s close. Meanwhile, the share prices of LG Electronics, the largest shareholder of LG GloCom, dipped by just W101, down 0.75% from the day before.
(Cho Hyung-rae, email@example.com)
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