Monday, February 23, 2009

South Korea - increased competition

KT-KTF Merger Heats Up Mobile Phone Market

Korea's leading fixed-line and broadband provider KT’s announcement last month of its plan to merge with wireless unit KTF is heating up the mobile phone market in the world's most wired nation.

KT's rivals SK Telecom and LG Telecom are raising their voices against the merger saying KT's dominance in the landline market will hurt competition in the mobile sector.

Currently, KT has a 90 percent share of the country's fixed-line market, 44 percent of its broadband market and over 31 percent of the mobile market. With that, SK Telecom is urging the government to reject the merger of KT and KTF.

KTF, however, argues it is SK that is too dominant as SK Telecom has more than 50 percent share of the wireless market, whereas KT has just over 31 percent. KT also says the merger is necessary as it is in line with the global trend of landline-mobile convergence.

The company hopes the merger will help it bundle landline, broadband, Internet TV and mobile services as well as beef up its customer base.

The merger is subject to approval by regulators and shareholders. If everything goes well for KT, the process will be completed by mid-May.

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