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SKT, am I nervous?

Posted: January 22nd, 2009, by Yunho Chung

SKT has called on the government to reject a plan by KT to merge with its wireless affiliate KTF, saying the merger will create a telecom giant and make it impossible to compete fairly.

From SKT’s point of view:

The KT/KTF merger will make an interactive transition of KT’s dominent position in the fixed-line telephone market into the mobile phone market. Becasue of that, the underlying competition in terms of developing new technologies or products in the telecom market will disappear. Just the competition in marketing will become severe, which means most investment, which is supposed to be made in R&D, is most likely to be used for markeitng purposes.

From KT’s point of view:

As Korean telecom market has been completely saturated, telecom operators are struggling to find a new way of services more appealing to customers, which is in line with the global trend in fixed-mobile convergence. The KT/KTF merger will enable KT to provide various converged products that customers can certainly benefit from at lower price so that the competion in Korean telecom market can lead to cheaper but high-quality services to customers.

We will see how Korea Communications Commission(KCC), the country’s broadcasting and telecommunications regulator, responds to it.

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