Cracks Among LG, Hanaro, And Powercomm

Within a consortium of LG Telecom, Hanaro Telecom and Powercomm, which is a new competitor for IMT-2000 service, cracks appeared. In the Telecom business sector, Skepticism is raised that it is unreasonable to reorganize the telecommunication market by three companies.

First of all, LG Telecom is requesting that a license for IMT-2000 should be given to LG Telecom, not a consortium. Nam Yong, President of LG Telecom, said that ``It is not plausible to join with Hanaro Telecom and Powercomm.``

Shin Yun-Sik, President of Hanaro Telecom squarely opposed to this position. ``The third telecommunication company should not be under the control of a certain conglomerate.`` Seo Sa-Hyun, president of Powercomm, also expressed his disapproval of the consortium led by LG, saying ``Participation in stock shares and privatization should be distinguished.``

Minister of Information and Communication, Yang Seung-Taik, is encouraging to form a consortium, mentioning concrete names of companies for the CDMA consortium. But the difference of interests between telecommunication companies makes it difficult to form a consortium.

Ministry of Information and Communication (MIC) is pursuing the plan to merge three companies into one company, or to combine three companies to make a joint company. But MIC has insisted on mediating behind the scene without any cause or policy line which brought about more confusion.

Furthermore, there is a quarrel that LG Telecom`s request for a sole license of the business is against the principle of equity. SK Telecom and Korea Telecom already acquired the license for IMT-2000 service through new corporate in the form of a consortium.

But an official of LG Telecom said that ``It is practically difficult to form a consortium, because Hanaro Telecom currently has the debt of 1 trillion 500 billion won and the accumulated deficit of 300 billion won.``

Hanaro Telecom expressed the opposition to this position, ``It would be difficult to raise the third communication company as well as CDMA service, if a consortium is formed under the control of a certain conglomerate.`` Powercomm also expressed its disapproval of Minister Yang`s selecting the member company for the consortium. That is, participation in stock shares and privatization should be distinguished.

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