Communication Companies Stumble in Attracting Foreign Investment

The consecutive failures in attracting foreign investment by the communication companies are expected to bring about many snags in the reinvigoration of the related industries and the restructuring plan of the communication companies.

The communication companies fell into the emergent situation in which they have to raise a huge amount of financial investment for launching the new business such as the next-generation mobile communication business (IMT-2000) as soon as possible. However, coupled with the worst internal and external stumbling blocks such as the economic slump and the US`s retaliatory war, the foreign investment has been called off one after another, resulting in the retardation of service, and the worsening of the related industries such as the communication system and the phone manufacturing.

The communication business circle said yesterday that the SK Telecom and the NTT DoCoMo were not likely to come to an agreement on the investment talks amounting to a few billion dollars.

And the Korea Telecom and the LG Telecom were also wrecked respectively in the overseas sales of its shares and the search for the foreign partnership for the IM-2000 business.

▼ SK Telecom`s Stock Sales On The Verge Of Collapse

As soon as a foreign newspaper reported that the talks between the DoCoMo and the SK Telecom were on verge of collapse, the SK Telecom instantly responded that the report was groundless. The UK`s Financial Times reported, ``The deal is 99.9 percent off due to disagreements over price and roll-out timing of the non-synchronous service.``

▼ LG Telecom`s Synchronous Service Hampered

The LG Telecom has looked for the foreign partnership to substitute for the second largest shareholder British Telecom (BT) since it recently acquired the business right of the synchronous IMT-2000 service. But its search is not likely to be achieved within this year. Although the LG Telecom planned to sell the 21.7 percent of BT`s shares to the new partner and to attract the financial investment for new business, it has failed to find out an appropriate partner since the negotiation with Canada`s TIW was broken off. And the LG Telecom made a plan to raise the business fund of 539.6 billion won for the IMT-2000 business via the issue of new shares to be purchased, it put off the plan as the stock price plummeted.

▼ Privatization of Korea Telecom Up In The Air

The overseas sales of Korea Telecom`s shares and its privatization also became uncertain due to the failure in foreign investment attraction. The Korea Telecom planned to sell the 15 percent of its shares (old stock 5 percent, new stock 10 percent) to foreign companies within this year, in order to finish the privatization until the end of June, 2002. However, there has been no conspicuous progress in negotiation with the foreign companies including the Microsoft.

freewill@donga.com