SK Telecom To Keep Hands Off From The Landline Operations

SK Telecom has decided to bring to a close the landline operations including the high-speed Internet operations, and to focus on the wireless Internet businesses. SK Telecom also plans to delay the next generation IMT-2000 service, which was expected to operate earlier next year.

President of the SK Telecom Pyo Moon-Su said at the press conference yesterday, ``The company decided to close down its landline operations to maximize the wireless projects, including the `high-speed Internet` and the `SyncRoad` services.`` Pyo publicly announced the closing of the landline operations saying that ``the company will sell its share in Hanaro Telecom and abandon its bid to acquire shares in the Powercomm.``

SK Telecom’s decision is interpreted as an effort to prepare for the structural adjustment in the tele-communication market by focusing on the wireless business. It seems that the structural adjustment of other landline operation that are having the financial difficulties, such as Daycom, Onsae Tongshin and Dreamline, will begin soon in a full scale.

SK Telecom began the `SyncRoad` service, which provides the high-speed Internet service through the cable TV net last December, and now has 54,000 subscribers. Although SK Telecom planned to host 0.4 million subscribers within this year, it has been having difficulties in expanding the market share pushed by the Korea Telecom and Hanaro Telecom’s aggression.

SK Telecom plans to sell off its landline operations as soon as the protection measures for the subscribers are prepared after consulting with the local cable TV businesses, who are the high-speed Internet business partners. Mr. Pyo said, ``The company concluded that there is no business synergy in the investment on Hanaro Telecom. The company plans to sell its stake in Hanaro as soon as the object of the sale becomes concretized.`` SK Telecom acquired a 6.12 percent stake (a total 16.16771 million shares) in Hanaro Telecom since 1997, and has lost more than 120 billion won.

In relation to the IMT-2000 service, Mr. Pyo implied the possibility of delaying the service saying that ``it is anticipated that the service will not begin in the earlier next year due to the setback in the supply of the global system for mobile communication (GSM) equipment, such as the terminal and the switchboard.`` ``If the government requires the GSM businesses of obligating the `Dual Band, Dual Mode`, the common use of the service will be definitely delayed,`` said Mr. Pyo. In relation to the allowance for the terminal, he also insisted that ``in order to activate the businesses, including the wireless Internet, the allowance for the terminal is necessary.``

freewill@donga.com