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IMT-2000 consortium in trouble

Posted August. 21, 2000 13:34,   


Korea Telecom, and SK and LG groups are facing difficulties in forming a consortium for the IMT-2000 project, as they failed to find an equipment manufacturer as partner.

It was expected that major equipment manufacturers would participate in the bidding, but they refused to take part in the consortium. So it is expected to be a consortium by a leading company and its subsidiaries. Experts indicate that the IMT-2000 project will be weak in terms of technology and competitive power if each consortium fails to form a good partnership.

Industry sources say that the three consortia will find it difficult to attract major shareholders with over 5% stakes. The three competitors for the IMT-2000 project practically have abandoned attempts to attract major telecommunications equipment manufacturers outside of their own business groups. So it is unlikely that the large equipment makers that the government wanted to join the project will participate in the consortium.

The Ministry of Information and Communication is calling for active participation by major equipment manufacturers, saying that it had worked out screening criteria to give high points to a consortium with major shareholders with over 5% stakes.

Currently, there are only a handful of companies, including Samsung Electronics, Hyundai Electronics Industries and Hanwha, that possess funding and technological capability to participate in the consortium.

As the initial capital of the consortium is around 300 billion won, the major shareholder`s contribution should be at least 47.5 billion won, so it is burdensome to equipment makers. Also, equipment makers are reluctant to participate because of the possibility of failing to sell their products to other consortia if they join a specific consortium.