SK Telecom urges gov't to reject merger of KT, KTF

SEOUL, Jan. 21 (Yonhap) -- SK Telecom Co., South Korea's largest mobile phone
operator, called on the government Wednesday not to approve a plan by KT Corp. to
merge with its wireless affiliate KTF Co., saying it would undermine fair
competition in the telecom industry.

Absorbing KTF, the nation's No. 2 mobile phone operator, is expected to help KT
better compete with rivals in the saturated telecom market.
However, SK Telecom and other smaller telecom companies have expressed concern
over the merger, citing KT's dominant position in fixed-line telephone and
broadband Internet services.
The merger is subject to approval by the Korea Communications Commission, which
oversees the telecom industry, and shareholders of both KT and KTF.
"If KT and KTF are merged, fair competition will disappear in the telecom
market," SK Telecom Chief Executive Officer Chung Man-won told reporters.
"The government shouldn't approve the merger," Chung said.
KT, a former state-run company, controls more than 90 percent of South Korea's
wired telephone market and nearly 45 percent of broadband Internet users. KTF
holds a nearly 30 percent share of the mobile-phone market, compared with SK
Telecom's 50 percent.
As the nation's telecom market becomes increasingly saturated, companies are
trying to promote combined fixed and mobile services to cut costs and woo
customers from rivals.
Last year, SK Telecom acquired the nation's No. 2 broadband operator
Hanarotelecom Inc.
South Korea is one of the world's most wired nations, with more than two-thirds
of homes connected to high-speed Internet and more than nine out of 10 people
owning a mobile phone.
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