I believe LG, which has a variety of telecom-related units, is best suited to become another major telecom group for 3G services, Yang Seung-taik was quoted in interviews with the local media after his new appointment as information minister. Ministry spokesman Choi Shin-kyun confirmed the minister’s remarks.
The government department also said that it would consider reducing license tenders if LG bid for the third and last license which the government plans to select in the first half of this year.
With some four million subscribers, LG cannot compete with SK Telecom, which has 14 million users and Korea Telecom with eight million on an equal footing if it has to pay the same license fees, Yang was quoted saying to the press. I’m ready to review everything, including a cut in license fees, if it helps develop the industry.
In December the government awarded two 3G licenses to collectives led by state-run Korea Telecom and SK Telecom.
LG Telecom, a mobile service unit of the LG Group, the nation’s third largest conglomerate, was rejected in the W-CDMA 3G license bid in December and had said it would not submit another bid. The company has however reversed its decision and now states that it intends to bid again if conditions are favorable. Shares of LG Telecom rose by the daily limit high of 12% for the second straight day on Tuesday to finish at 5280 won.
If the government does decide to reduce fees and make a special case for LG competitors may well seek to take legal action, challenging the ruling.
