KT Corp. gets final regulatory approval to absorb KTF

SEOUL, March 18 (Yonhap) -- KT Corp., South Korea's biggest fixed-line telephone
and broadband Internet operator, won final regulatory approval to merge with its
mobile phone unit, KTF Co., the nation's telecom regulator said Wednesday.

The approval by the Korea Communications Commission will make KT a telecom
powerhouse in fixed-line and wireless services, enabling it to better compete
with SK Telecom Co., the nation's largest mobile phone company.
Still, the merger is subject to the approval of shareholders of both KT and KTF
on March 27. Last month, the nation's anti-trust regulator approved the merger,
saying it won't undermine fair competition in the market.
A merged company will be launched on May 18, KT said earlier. Under the proposed
terms of the merger, KT will offer 0.719 of its stock for each KTF share.
If approved by shareholders of both companies, the transaction will create a
company with annual sales of about 19 trillion won (US$13.3 billion), a total
asset value of 23.6 trillion won and some 38,000 employees, according to KT.
KT Chief Executive Officer Lee Suk-chae, a former minister in charge of telecom
firms, told reporters that the merger will cut costs and enable KT to offer
combined fixed and mobile services at cheaper prices.
KT, a former state-run company, controls more than 90 percent of South Korea's
wired telephone market and services 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.
(END)