By Cho Jin-seo
Staff Reporter
The Fair Trade Commission (FTC) gave a conditional go-ahead to the acquisition of Hanarotelecom by SK Telecom after two months of ruminations Friday, advising the largest mobile operator to share its efficient radio frequency band with competitors from 2011.
The decision sparked an immediate protest from SK Telecom. Its two competitors KTF and LG Telecom showed mixed reactions, calculating their respective advantages and disadvantages.
Based on the FTC's decision, the Ministry of Information and Communication will confirm the 1.1 trillion won deal next Wednesday. The antitrust authority said that SK Telecom's radio frequency band should be ``fairly redistributed'' in 2011 when SK Telecom's current contract with the ministry expires.
The 800-megahertz frequency band is considered the most efficient one available for mobile phone networks in Korea. KTF and LG Telecom use 1.8 gigahertz bands, which does not have as much coverage in mountainous areas and thus need more antenna towers and transmitters.
``We feel sorry that the FTC ruling will possibility offset the synergy from the acquisition,'' SK Telecom said in a statement. ``It is regretful that selfish claims from our competitors have clouded the positive side of this deal.''
The company also said that the acquisition of Hanarotelecom was an inevitable decision for its survival, because its competitors, KT Group and LG Group, already have business portfolios based on the convergence of wireless and wireline networks.
The FTC decision also included a couple of ambiguous clauses, leaving room for further controversies and arguments: it said SK Telecom ``should not discriminate its competitors'' in selling bundle products of mobile, home phone and Internet services.
KTF, the No. 2 mobile operator, said it welcomes the FTC decision in a statement. The runner-up player is also preparing to forge a closer partnership, or even a merger, with its parent firm KT, the dominant fixed-line telephone and broadband Internet operator.
On the contrary, LG Telecom, the smallest of the three, demanded more harsh actions from the ministry.
``This is not enough to prevent the SK Telecom-Hanarotelecom deal from damaging the fair competition in the market,'' the firm said. It asked the ministry to put a 50-percent limit on SK Telecom's market share.
SK Telecom won an international bid to buy Hanarotelecom, a telephone and broadband Internet service provider, late last year. The firm has been rather relaxed about the situation until recently, believing that the incoming Lee Myung-bak government's promises to deregulate the telecom industry will pave the way for the approval of the Hanarotelecom acquisition. But as pessimistic rumors began to spread, the firm has become more alert to the development of the issue this week.
On Thursday, its CEO Kim Shin-bae abruptly returned to Korea from the Mobile World Congress in Barcelona where he was supposed to give a keynote speech that day. He was reported to have visited officials of the ministry and the FTC to defend the firm's position.
indizio@koreatimes.co.kr