SK Telecom Will Review the Investment Plan

At 1 a.m. of January 24, there was a public notice of SK Telecom in a fair notice of the stock exchange. SK Telecom announced, “We will purchase 3% of total securities issued and will review the 2003 investment plan.”

It was an urgent action for the lowest stock price of SK Telecom on thirty three months. Analysts said that a sharp decline of stock price was caused by that SK Telecom decided to invest 520 billion won for W-CDMA equipment in the investment seminar on January 22.

Jung Seung-gyo, analyst of LG Investment & Securities said, “As investors didn’t endorse the determination of SK Telecom, the stock price suddenly dropped. The market doesn’t admit an unprofitable investment.

As another example, KT decided to invest for 3 trillion won this year. Then, foreign investors gave tips. Brandis, first shareholder of KT requested KT presented the investment plan of Telstra, the first wire communication company of Australia as a comparison target. Then, it requested KT to reduce the investment amount because the current communication industry doesn’t have a new business of the growth potential.

Finally, KT reduced the investment amount to 2.6 trillion won equivalent to 21% of estimated sales amount of the year. Before a privatization, KT invested for 30% of sales amount.

Kim Chang-geon, IR manager of KT said, “Because the KT owner is the investor after the privatization, it is natural to determine the investment through discussion with shareholders.”

However, some experts are worried about that the long-term business competitiveness will decrease when the company determines the investment scale according to opinions of investors who concentrated on the short-term result.

Song Yu-jong, chief of technical policy, the Ministry of Information and Communication indicated, “If we consider the short term profit, an excessive investment such as a semiconductor investment of Samsung Electronics was not possible. As the domestic mobile communication industry has invested in an advanced field, it can maintain the world competitiveness.

Jong sik Kong kong@donga.com