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KTF, LG want SK Telecom's market share cut

SEOUL - South Korea's two runner-up cell phone carriers on Thursday demanded that the government reduce SK Telecom Co's market share to less than 50 percent.

In a joint letter, KTF Co and LG Telecom Ltd urged the government to take immediate action to prevent SK Telecom from monopolizing the market, arguing that SK Telecom's dominant market share was a result of its merger with Shinsegi Telecomm in December 2001.

At that time, the Ministry of Information and Communication approved the merger on the condition that if any "serious" problems for consumers or competitors were found, the ministry would be able to impose sanctions against SK Telecom.

"SK Telecom's monopolistic position in the market strips consumers of their chance to select the service they want. It also restricts competition," said Kang Shin-koo, an LG Telecom spokesman.

At the end of November, SK Telecom had 18.16 million cell-phone subscribers in South Korea's 33.44-million strong wireless market. KTF had 10.45 million and LG Telecom 4.74 million.

In terms of revenues, SK Telecom accounted for 61.6 percent of the entire wireless service market, the two companies said.

KTF and LG Telecom said that if their demand was not met, they would appeal to the government to nullify the merger. SK Telecom denounced the move by its two smaller rivals, stating that the company has already fulfilled the merger conditions.

"Such demands don't make sense and we don't have any responsibility to keep our market share below 50 percent," said Huh Jae-young, an official of SK Telecom's public relations team.

With a new rule that allows cell-phone users to switch carriers while keeping their phone numbers less than two weeks away, operators have been scrambling to lure away subscribers from their rivals. The wireless number portability rule becomes effective January 1.

Under the South Korean government's policy to favor industry laggards, SK Telecom will be affected by the new rule a year after. So, the company will be banned from drawing customers away from LG Telecom or KTF for all of 2004.

(Asia Pulse/Yonhap)

Dec 19, 2003

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