Korea considers easing 3G licence fee payment scheme

South Korea said on Friday it was considering an instalment payment of 3G mobile licence fees for the third and last 3G operator to be selected by end-June.

"After talks with the ruling party, we are going to allow the 3G operator to pay its licence fees in instalments and with no interest charged if the bidders want," the Information and Communication Ministry said in a statement.

Local media earlier in the day quoted Minister Yang Seung-taik as saying the government might allow the 3G operator to pay the fees over 15 years.

The government awarded in December two 3G licences based on W-CDMA technology, which is being promoted by European mobile firms, to consortia led by state-run Korea Telecom and SK Telecom, Korea's largest mobile carrier.

It plans to award one more 3G licence using Qualcomm's cdma2000 technology, on which most Korean telecom equipment makers rely for production of mobile phones and equipment, preferably in the first half of this year.

Korea has delayed the selection of a cdma2000 3G service provider twice on a lack of interest from telecom companies, who viewed the cdma2000 technology, which commands a smaller user basis globally, as unprofitable.

LG Telecom and Hanaro Telecom, both units of the LG Group, have said they could enter the 3G bid if the government eased conditions, including a cut in cdma2000 licence fees estimated at 1.15 trillion won ($853.6 million).

The two telecom groups led each by SK Telecom and Korea Telecom won their 3G licences at 1.3 trillion won in licence fees each.

Minister Yang said last month it could review terms if the LG Group opted to bid.

He also said the LG Group, which has a variety of telecom-related units, was best suited to become another major telecom group for 3G services.

Shares of LG Telecom finished up three percent at 5,140 won on Friday. Hanaro ended up 30 won at 2,980 won.