By Kim Yoo-chul
SK Telecom said Tuesday that it had submitted official letters to the Fair Trade Commission (FTC), the Korea Communications Commission (KCC) and the Ministry of Science, ICT and Future Planning (MSIP) for approval of its proposed takeover of CJ HelloVision (CJH).
“SK Telecom seeks approval for our plan to acquire CJH. We’ve filed official requests with the three government agencies,” the firm said in a statement.
If approved, the deal is expected to close sometime in April next year.
As the takeover is a combination of the country’s biggest mobile carrier and top pay-TV operator, SK Telecom said it delivered thousands of pages to the agencies to explain the reasons, background and estimated impact on the local telecom market after the completion of the takeover.
SK Telecom said CJH will be acquired by SK Broadband, its broadband business affiliate, if the government gives it the green light.
An FTC spokesman said the country’s top anti-trust regulator will have a lengthy review of the takeover proposal to determine whether or not it will hurt fair market competition. The MSIP said the telecom regulator will look into whether the plan breaks the Telecommunications Law.
SK Telecom said it will hold a press conference at its headquarters in downtown Seoul on the issue, Dec. 2.
Rival KT issued a statement urging the government to block the proposed takeover as it will seriously hurt market competition and limit consumer choice on pay-TV programs.
“Despite the plan receiving criticism from the industry, academia and civic groups, SK Telecom still filed its official requests to the government. We are very sorry about that,” KT said in a statement.
KT said the SK-CJH deal is against Article 4 of Section 7 of the Fair Trade Law. According to this, the FTC has the right to block a deal which is a combination between the top players in each industry.
SK Telecom has a 50 percent share in the local telecom market, while CJH’s share in the local pay-TV sector reaches over 60 percent.
KT teamed up with the smallest carrier LG Uplus to oppose the SK-CJH plan. LG Uplus also said that the deal will violate the country’s Fair Trade Law, which prohibits a takeover that may curtail fair competition.
Korea Broadcasting Association, a lobby representing the interests of Korea’s top three terrestrial broadcasters ― KBS, MBC and SBS ― also said in a statement that the deal will hurt diversity of content.