Possibility for Foreigner to Hold Large-Shares of `IMT Synchronous Service Business`

Will a foreign company emerge as a company of the IMT-2000 service business?

Ministry of Information of Communication recently offered the possibility for the foreign company to be a large shareholder, and begun to review the rules, is it reported on 25th. And since one of competitors, the LG Telecom, is reviewing the plan to sell a considerable amount of the shares to Canada`s Telesystem International Wireless (TIW), it is anticipated that the first foreign communication company will emerge.

But the communication companies pointed out that ``The government has tried to select an IMT-2000 service company in order to develop the domestic CDMA technology. Therefore, to pass over to a foreign company due to the delay of the selection is to put the cart before the horse.``

Minister of Information and Communication, Yang Seung-Taik declared for the first time the possibility for the establishment of a foreign communication company. He told to the reporters just after the meeting with CEOs of Canada`s TIW on 18th, that ``The foreign company could be a synchronous service company.`` It is reported that the CEOs of TIW declared an intention to invest somewhere between $ 0.35 billion-$0.4 billion and demanded Minister Yang to guarantee the right of management.

And LG Telecom will decide for the amount of the shares of participation by the end of this month through the negotiations with TIW.

But it is pointed out that to give to the foreign company the synchronous service business based on the domestic technology is to drain the national wealth. First of all, the contribution money of synchronous business company would be 220 billion won, which is one-fifth of the non-synchronous service company.

And the government has established the supporting measures such as guaranteeing a market share through the asymmetrical regulations. Therefore, if a foreign company becomes a large shareholder of the business, it will receive huge benefits from such policy measures.

Especially, it is skeptical whether the foreign company will maintain the basic policy line to develop the small and medium communication technology companies, while pursuing the commercial profit.

Professor Kim Sang-Taik of Ewha University told that the issue on the drain of national wealth should be considered first before discussing the legal issue related to foreign large shareholder.

Meanwhile, LG Telecom told that it received `the proposals for the consortium participation` from about 130 companies, including 5-6 conglomerates, and about 20 companies in the medium standing.

freewill@donga.com