Korea Telecom launches 3G group

date: 16th March 2001, source by: Reuters

State-run Korea Telecom, the nation's largest fixed-line telephone company, launched on Friday a company that will take up its 3G mobile service business.

``By the end of 2004, the third year into business, we will roll out a nationwide 3G network for a variety of mobile services,'' said Cho Young-joo, president of the new entity, named KTICOM, in a statement.

The South Korean government awarded 3G licences in mid-December to two consortia each led by Korea Telecom and SK Telecom , the nation's largest mobile carrier.

SK Telecom launched its 3G group, SK IMT, early this month.

The government plans to give out one more licence, preferably by the end of the first half of this year.

Third-generation, or 3G, mobile technology is expected to provide high-speed Internet access, data, video and CD-quality music services.

3G should allow data to be sent and received at least five- to 25 times faster than current 2G speeds.

With an initial start-up capital of 1.8 trillion won ($1.40 billion), including 1.3 trillion won in licence fees to be paid to the government, KTICOM plans to start a commercial 3G service in May 2002.

Korea Telecom said in the statement KTICOM would spend a total of 11.3 trillion won on the 3G network rollout and in other facility investments from this year through April 2007.

The company said its 3G group would sell 15 percent of its total share issuance to foreign telecom companies to help raise needed capital.

KTICOM would also raise about one trillion won through several rights offerings until 2004.

``We expect to turn to profit in 2005 with four million 3G subscribers,'' the statement said.

Korea Telecom has 46.59 percent of the 3G consortium. Its two mobile units -- KT Freetel and KT M.com -- have 10 percent and five percent of KTICOM, each.

Korea Telecom has said it was reviewing a possibility to eventually merge KTICOM with its two mobile affiliates to enhance effectiveness.

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